Seeing an explosion in Utah health-care costs, a governor's task force concluded that the Utah attorney general should investigate complaints of abuse by health-care providers that dominate Utah's market.
The Governor's Task Force on Health Care Costs specifically suggested the state conduct a "full investigation of possible anti-competitive activities and violations of the public trust" by health-care providers.David Wilkinson, then attorney general, said the office didn't have the resources to conduct a timely probe.
But Utah Attorney General Paul Van Dam launched an investigation into Utah's health-care industry, first focusing on possible antitrust violations between the state-owned University Hospital and Primary Children's Medical Center, owned by Intermountain Health Care.
The investigation centers on the pediatric and newborn intensive care units of both hospitals and a private corporation formed by pediatricians associated with both the U. and Primary.
"Competition between the only two hospitals which provide in-depth care to children is necessary in order to keep costs low and to ensure the best possible care," said Joe Tesch, chief deputy attorney general.
The local investigation coincides with probes by several other government agencies concerned that doctors and hospitals are violating antitrust laws, thus driving up health-care costs.
But Scott S. Parker, president and chief executive officer of IHC, and Sen. Orrin Hatch, R-Utah, aren't convinced cooperation between hospitals is bad.
"Antitrust law is not biblical in origin, as your more liberal lawyers would have you believe," Hatch said. "Frankly there is every reason in a society that is reeling from (medical) costs to try to allow cooperative efforts among various groups to try to keep costs down. Under certain aspects of antitrust laws, you are unable to do that these days - at least in accordance with some of the interpretations."
Tesch counters that antitrust law may not be biblical, but "it isn't written on toilet paper, either."
Utah's antitrust law dates to the state's constitution, which was written in 1898. The Legislature updated the laws in 1979 and compiled them into the Utah Antitrust Act.
Tesch said the Legislature believed competition was fundamental to the free market system and would result in the lowest prices and highest quality for consumers.
The act was meant to benefit the public by fostering competition. "It provides civil and criminal penalties for antitrust violations," he said. "They powered the attorney general's office with the primary responsibility for enforcement of that act."
Hatch believes there's a need for antitrust laws. "But I have found that certain interpretations of antitrust laws decrease competition and increase costs. They are very expensive to society as a whole," he said. "But you can't change them because there are liberal members of Congress who just seem to love trial lawyers."
Tesch disagrees. "We already have the report by FHP demonstrating a significant cost increase now that the company has to deal with a single source provider - Primary Children's and University Hospital," he said. "We have also read the increased cost for helicopter transportation for neonatology patients since University Hospital dropped this service."
But Parker used the helicopter controversy to support his claim that the public should take a closer look at antitrust laws.
"They (antitrust laws) weren't developed to stop hospitals from being cooperative. It is ludicrous that hospitals can't sit down and talk about shared services that would reduce costs for the community," he stressed.
"This helicopter example is a classic. It's so foolish that we can't talk with the University of Utah openly about integrating a helicopter system for the good of the whole community because the attorney general's office representing federal and state law is concerned about it."
He added, "You have got to make some exceptions in health care and try to figure out how we can really work and cooperate with each other - or we are lost."
But Tesch contends that if Utahns ever have only one health care provider for children, "then every parent needs to understand that they will have no choice in the place, quality, price or control of the services rendered. If there is only one source, you are at the mercy of that single source."