Regulating for Efficiency in Health Care Through the Antitrust Laws

From the inception of the Sherman Act, the need to evaluate the competitive consequences of cooperation among rivals has posed a central dilemma for antitrust enforcement. Such collaboration can reduce rivalry, alter market structures, or facilitate other, more pernicious forms of collusion. Yet often these same activities carry the promise of creating cost savings, effecting synergies, correcting market failures, or producing other benefits. Considerable uncertainty attends factfinders' assessments of which effect will occur and of its probability and magnitude.

Further complicating the task is the prospect that both results may occur simultaneously: collaboration lessening marketwide competition can also produce cost savings or other benefits. In this circumstance, it is at least theoretically necessary to weigh costs and benefits before determining the legality of the activity.