The Utah attorney general's office says an investigation into the apparent lack of competition among the state's health care providers is warranted.
"Based on the recommendation of the many complaints about health-care costs that our office has received, we believe a fact-finding investigation is justified," Associate Attorney General Paul Warner said Monday. "There appears to be smoke; maybe there's a fire, and maybe not."The Governor's Task Force on Health Care Costs recently recommended that the attorney general investigate complaints of abuse of "market-dominant positions by providers of health care."
The 14-member task force urged that "if any of these concerns are deemed to have a basis in fact . . . the attorney general (should) conduct a full investigation of possible anti-competitive activities or violations of the public trust."
The issue came to a head recently during a public hearing on the task force's preliminary report on health care costs. During that hearing, Intermountain Health Care - which owns 17 hospitals in Utah - was singled out as a corporation that should be closely examined.
The preliminary report, released to the public in August, shows that total health care expenditures in Utah rose at a higher average annual rate from 1982-86 than in the previous six years when Certificate of Need regulated health care expansion. Despite the rates of increase, the expenditures continue to be below the national average.
Utah, the report also said, appears to have a more concentrated hospital market than any other state in the nation.
And IHC, according to data gathered by the Utah Department of Health dominates the acute care hospital market. A review of several factors - discharges, patient days, licensed bed capacity, total hospital revenues, and total hospital expenses - shows that IHC appears to have from 51 percent to 57 percent of the market in each year since 1981.
This doesn't mean that the task force is accusing IHC of wrongdoing.
"The full implications of such market dominance are not certain," said task force chairman Robert Huefner, professor of political science at the University of Utah.
"Indeed there are trends throughout the hospital industry in America towards consolidation into fewer and larger hospital systems," he said. "Market concentration offers some positive impact in terms of stability, and in terms of opportunities to offer needed but unprofitable services, or even whole institutions, such as rural hospitals.
"Market concentration is common in rural areas since it is unrealistic to expect more than one hospital to survive financially in such areas."
On the other hand, Huefner said the task force has had various concerns expressed about the perceived or potential abuses which can accompany market dominance by either physicians or hospitals."
IHC spokesman Stewart R. Kirkpatrick said there is no doubt about IHC's dominance of the state's health-care market, but he denied the corporation had done anything wrong to obtain that position.
"We welcome any fact-finding measures by the attorney general's office because we believe that we have lived by the spirit and letter of anti-trust laws at IHC. We have a compliance program so that we are not in violation of any anti-trust laws," he said. "But if we are, we want to know about is so we can correct it."
"We, too, are pro-competition and we do well in competing with other health-care providers."
IHC owns 10 or 11 rural hospitals in Utah - many of which would have failed had the corporation not moved in. A number of those hospitals are still losing money. "But we are more concerned with providing access to care for those communities than making money," Kirkpatrick said.
When the attorney general's probe will be launched is unknown. "We are willing to do what the task force has asked, but will have difficulty doing that in a timely manner because of limited resources. There are a lot of other priorities that are more pressing at this time," Warner said. "Getting into a whole new area right now would spread us extremely thin."
Warner is hopeful the task force will come up with additional funding for such an investigation. That and other matters may be discussed with task force members meet again Wednesday to do a final review of their report to the governor.