AHLA's Speaking of Health Law

Forecasting Health Care Antitrust Under a Second Trump Administration

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Lisl Dunlop, Partner, Axinn Veltrop & Harkrider LLP, speaks with Mark Seidman, Partner, Weil Gotshal & Manges LLP, about some of the potential health care antitrust priorities of a second Trump Administration. They discuss how antitrust enforcement has changed over recent administrations; and the incoming administration’s potential approaches to the new Merger Guidelines, hospital merger enforcement, focus on labor market impacts, private equity in health care, and the FTC’s rule banning non-competes. From AHLA’s Antitrust Practice Group. Sponsored by Axinn.

Listen to Lisl and Mark’s October 2023 podcast, when Mark was Assistant Director for the Mergers IV Division of the FTC’s Bureau of Competition.

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Speaker 1:

Support for A HLA comes from Axon, which brings unmatched depth in the skills needed to address healthcare , collaboration and competition. They are one of the best known antitrust firms in the world with more than 60 full-time competition lawyers. They represent companies across the healthcare universe and help clients avoid antitrust landmines, complete mission critical deals, and protect their interests in litigation and investigations. For more information, visit axon.com.

Speaker 2:

Hi, everybody. I'm Liesel Dunlop. I'm a partner in the antitrust practice at Axon, and I'm a vice chair of the ALA's , uh, antitrust Practice Group. I'm here today with Mark Seidman, a partner, a partner in the antitrust practice at Weill . Say, hi, mark .

Speaker 3:

Hi, Lisa . How are you?

Speaker 2:

Good. While I've been an outside counsel for over 30 years, mark hasn't been at Weill that long. Uh, you may have heard our last a HLA podcast conversation about a year ago , uh, discussing the FTCs then policies and healthcare enforcement priorities. Uh, at the time, mark was head of Mergers four, which is the division at the FTC, responsible for hospital mergers among other things. So come January 20 next year, there will be a new team in the White House and a change in antitrust enforcement policies and personnel. Mark and I have both seen a fair bit of regime change over our careers, but from very different perspectives. In this podcast, we'll discuss how some of the key enforcement priorities of the Biden administration may change next year . And the Antitrust Practice Group will probably be putting on more programs about this as things progress. Of course, these are very rough predictions, and they're not attributable to our firms, our clients, or maybe even to us post January 20, as we'll discuss. Things are already developing as the incoming administration announces plans and upcoming nominations and appointments. So un until the Biden administration, my view of the impact of a change of administration from Democrat to Republican and back again, was that for the most part, antitrust enforcement policy in healthcare was fairly consistent. Would you agree with that, mark ?

Speaker 3:

I think it was fairly consistent. I think that's, that's accurate. Um, there are always subtle changes and, and changes in emphasis, but , um, certainly on , in the healthcare front, healthcare has always been a priority. And , and as in my memory , um, for both the FTC and the Department of Justice , um, and in, in my area , um, of focus when I was at the FT C and the hospital merger area , um, that was a consistently a bipartisan focus. And so I think, again, you did see some , um, some changes in approach, some subtle changes in how , uh, uh, how administrations approached and antitrust theory, but fundamentally , um, the , the, the swings between administrations were not that significant , um, when it came to, to healthcare enforcement.

Speaker 2:

Yeah, and I think we kind of saw the harbinger of change through the last Trump administration and maybe even earlier , um, as people were starting to question the Chicago school and consumer welfare basis for , um, antitrust enforcement. And you had academics, academics at the time, like , uh, Lena Kahn and Tim Wu , um, you know, leading the charge a little bit on evaluating business conduct in terms of impacts on, you know, people, employees, small business and those kind of things as distinct from the more of a focus on consumer welfare and pricing, innovation, quality, those kinds of measures. Um, and I think a strong body of thought was coming up during , um, that period leading up to the Biden administration that , uh, the consumer welfare standard, the way that the agencies had been looking at things , uh, led to overlaps , antitrust enforcement and resulting , uh, high concentration and big firms , um, and the , the Biden administration looks like it was the opportunity to put the new ideas into practice. And we, we really saw a big change, I think, in , um, the rhetoric around antitrust enforcement and , uh, to some extent , um, the way that the agency approached its enforcement agenda. But I think the question for us here is, you know, how how is this likely to change going forward? Has , has the pendulum swung and is going to swing back or I is , is the change going to be more subtle than that? What do you think?

Speaker 3:

No , I think that's a really interesting question, Lisa and I , I I think there's, there , there are two parts to that question, right? There's a question of how much is the rhetoric going to change, and how much is the rhetoric going to swing? And the, the public messaging around antitrust, both from agency leaders, but also from other political actors. I think one of the things that has , has really changed over the course of both of our careers is the, the political focus on antitrust. Um, it, it , if, if you go back 15 or 20 years, it was a much more , um, uh, uh, an area of law that was, was handled mostly by specialists. And it's not that Capitol Hill didn't know about antitrust, but they, they seem to leave it alone a bit more. It is something that shows up much more in , uh, political debates, political campaigns , um, and, and receives a lot more political attention. And as a , as a result, I think there's a lot more, more political rhetoric that can lead to different types of enforcement actions, but it doesn't necessarily lead to different types of enforcement actions. And sometimes, and I think healthcare is an area that where this is true, is you sometimes need to sift through the rhetoric a little bit and, and see how cases are being brought, how they're being pled , how they're being litigated , um, to really gauge , um, whether there's been a , a dramatic change in, in the, the , the pendulum swing from administration to administration.

Speaker 2:

Yeah, good point. I mean , uh, one, one thing that we could think about was personnel. And, you know, to some extent the , um, policy and, and rhetoric is, is driven by the tone from the top. Um, and traditionally I think you've had the leadership in the agencies coming from a fairly , um, consistent group of people who were, you know, fairly deeply knowledgeable about antitrust law. And, and so while there would be slight changes in approach and priority, you know, the, the underlying theories and the way that , um, the staff were directed to approach cases was, was fairly consistent. And then you had Lena Khan , who, you know, was a relative outsider to the agencies and hadn't practiced , uh, before the agencies before her appointment. Um, and the other, the other factor I think we've seen is a lot of support from the White House. So we've seen the executive order on competition. Um, Biden gave speeches, this whole of government approach to , um, antitrust, getting the other agencies coordinating with the , uh, FTC and DOJ antitrust division , um, the White House Competition Council , um, and, you know, then healthcare specific, the December, 2023 fact sheet , um, on healthcare competition with a particular emphasis on for-profit and private equity ownership. So, you know, having that , uh, white House backing and White House focus , um, as well as congressional focus, I think is, is a bit of a change , uh, from, from what we were doing before. Um, and , and one of the things that suggests to me that some of that might be continuing through this Trump administration is how early we're starting to hear about new appointments, right? I mean, here we are on December the 11th, where still over a month away from the inauguration, and we already know who the leadership of the agencies is gonna be. I , I, that for me, that's unprecedented. Um, I did take a look at, at prior , um, administration switches and, you know, things happened relatively quickly in the , for the most part, you know, usually about three to five months. Um, there were some notable differences. Um, I think Mac and Del Raheem , uh, took a while to, to come in. Um, and even, even, you know, in the current administration, Jonathan Kanter took several months to, to actually be appointed to get through confirmation. Um, but you know, already we have announcements about Gail Slater being put forward for , um, assistant attorney general for antitrust . Um, the , uh, existing Commissioner Ferguson is going to be appointed chair. Um, and , um, there, there's also someone else who's been , um, nominated to, well, will be nominated to be , um, a Republican commissioner. Um, and I mean, what, what do you think about that Mark from, from the perspective of, of how enforcement might change?

Speaker 3:

Yeah. I, I , I agree. I think this is as early as I can remember appointments ever being announced. Um, and I think that that signals a couple of things, and it signals , uh, one that antitrust is a priority for the incoming Trump administration. The, the Biden administration made no secret of , uh, what a priority antitrust was going to be. Um, when, when President Biden took office, and he, he nominated Lena Khan and Jonathan Cantor , and in fairly short order that, that, those were relatively quick appointments compared to some past administrations. They weren't this quick , uh, but they, they, they were quick and he and President Biden also started , uh, a White House office of, of competition with Tim Wu . And so I think that that was something that was relatively new with the Biden administration. And it's interesting to see the Trump administration, you know , I don't think we'll see the Trump administration follow exactly the path of the Biden administration. That would be a , a huge surprise. But it's interesting to see antitrust , um, taking a , a similar , uh, high profile role. And I think another thing that, that, that leads to, and this is , it goes back to something you were saying before, Liesel is the, the, the, the political focus on antitrust , uh, the , the , the nominees for these agencies are going to know, because of how early they were nominated and because of the political focus on antitrust, they're going to know that there is a microscope on what they're doing, and that can have a real effect on, on how they, they operate the agency. I think there is, one of the other evolutions in antitrust has been how agency leaders have thought about what, what antitrust people tend to , to, to call error cost , or how are they going to lead towards over enforcement or under enforcement? And sometimes that decision is ideological. Sometimes there's a view that , um, that, that the right approach for enforcement is either conservative, less enforcement, you know , arguably under enforcement, or that the right approach is, is perhaps to over enforce when there's, when there's a tough call. But when you know that, that you're , there's political scrutiny on what you're doing that can, that can change the , the calculus as well. Um, and I , I think it tends to change the calculus in favor of enforcement, right? If you are concerned that you might have to answer for a merger that went through under your watch or conduct that went un remedied , um, that that can lead agency leaders to be , um, more aggressive, even apart from, from their ideology.

Speaker 2:

Yeah, I mean, I think that's right, that the, the different types of, of errors and, and your , uh, tolerance for one or the other. I mean, I think traditionally I would've said a Republican led administration would have, you know, wanted to credit and permit transactions if we're just talking about deals , um, that, you know, may lead to efficiencies and synergies, which, which would eventually be passed on to , to the market and, and not wanting to stop that kind of pro-competitive activity where the competitive impact was maybe more speculative or not, not overwhelming. Um, whereas I think that there's a lot more skepticism about the benefits of, of, of those , uh, synergies and efficiencies, even to the extent of looking at some of them as bad things. Like, you know, if a synergies in , um, cutting down on your employment costs because you don't need as many people, well, that might actually not be such a good thing if you're an employee. And those kind of concerns are getting a little bit more , um, traction these days. So I , you know, I think we've moved away from , uh, an acceptance of the, the more , definitely through the Biden administration, we've moved away from an acceptance of the positive outcomes , uh, of transactions as a general matter. And frankly, from a private practitioner perspective , um, you know, the attitude to mergers really seems to be very discouraging. Um , and, you know, we may not swing back all the way because of this kind of bigness concern , um, that you see coming through, even even in in the Trump , um, policy statements and things like that. Why don't we talk about some specifics. Um, you know, one of the things that we talked about when we chatted last year was the new merger guidelines. Um, that that was a huge undertaking for the agencies . You probably saw some of the sausage making yourself. And , um, they were finally , um, released, I think, right at the end of last year. Um, and, and there was quite a lot of controversy about them because they were, you know, different from what we had been working with. Um, and you know, an interesting observation is the prior guidelines were from 2010, so it was 13 years between guidelines and how many change of changes of administration in that period. Um, but everyone found them . Okay. Um, and then there was this, this huge rewriting under, under Biden, but Mark, you can tell me, I mean, were , were you gonna change the merger guidelines before now anyway, <laugh> ?

Speaker 3:

No, I think the , the, the merger guidelines change was arguably the biggest substantive change , uh, in the, in the, in the Biden antitrust administration. It was , um, it , it was a huge undertaking as you suggest. I think , uh, it, both, both Lena Khan and Jonathan Cantor , um, publicly expressed a desire to, to, to change the merger guidelines from, from the 2010 version. And as you said, that did not come out with a, with a, a final revised version until December, 2023. So it, it took a long time. It took a lot of work. And, and they are, they are certainly substantively different. I think they , uh, the, the guidelines look on their face very different than past iterations of the guidelines where , um, it , it , the guidelines started in 1968, and they were, they've been periodically updated since then, and they certainly have changed significantly since 1968. But it was a more of a gradual evolution. And the , um, the, the framework for the guidelines stayed somewhat consistent and was tweaked at each time, and in these guidelines represented just a wholesale change in how the, the guidelines were presented. So they, they, they look very different. Um, but I think it's going to create a , a , an interesting question for the next administration about how they're going to, to deal with these guidelines. I don't expect that they're going to come in and fully embrace and fully endorse , uh, the guidelines as written. There's, there's been a lot of criticism from the guidelines, and they were , um, they were issued at a time when there were , uh, there were only democratic commissioners. Uh, so it was, it was a , a three oh vote at the commission and, and obviously at DOJ , um, only Democrats. And so with the Republican administration coming in, I, I would be surprised , uh, to see them endorse the guidelines, but how they actually deal with the guidelines is a little more difficult question. And it's, it's a little bit harder to predict , um, exactly how I think the basically have three options. I think they could leave the guidelines in place. They , they could leave the document on, you know , literally on the websites and leave, leave them in place and, and just choose how to enforce within those guidelines. I, I certainly think the , the, the current guidelines would, would not constrain a Republican administration in some way. They might not enforce it to the, to , to the full. Um, and I could imagine a , uh, a new administration giving some signal, whether through speeches or articles or otherwise, about exactly how , uh, how they're going to enforce the guidelines or what parts of the guidelines they're going to emphasize or de-emphasize. And the way these guidelines, the 2023 guidelines are structured , um, is as technically, they're , they're really , um, a set of separate guidelines. It's, it , it reads like 11 different guidelines. It's, and it's , it's really six with the remaining being auxiliary guidelines to the first six. So there is an opportunity to pick and choose which ones you're going to emphasize, which ones you're going to deemphasize, think the this administration could go down that route. Um, that, that , that's certainly possible. Um, and some of the guidelines are , uh, are, are fit into pretty well established theories. I mean, certainly the first, the first few guidelines in the document talk about market structure of mergers. They talk about unilateral effects of mergers, and they talk about coordinated effects of mergers. There's also discussion of vertical mergers and potential competition mergers. These are all theories that past administrations have, have pursued. So the, the 2023 guidelines mixed up the, the puzzle pieces in some sense, but it's a lot of the same puzzle pieces are still there. Um, so it , it , it , it does seem very plausible to me that these guidelines stay in place. There is the possibility, of course, that they revoke the guidelines, in which case the , the new administration would have essentially two options. And I think that the, the , they wouldn't want to go forward without any guidelines. So either they would quickly revert to the 2010 guidelines, which I would be surprised. I , I don't , I don't think that , um, there , there's a lot of debate around whether the guidelines needed revision and what aspects needed revision. But I'm not sure that a return to , to the 2010 guidelines is something that I, I've seen much, much support for. Um, they could also issue new guidelines. I think that's a tall order. Um, as we said in the beginning here of this discussion, that was a huge undertaking for the, the current administration. And I imagine it would be a huge undertaking for Republican administration. It may seem simple in, in theory to say you wanna redo the guidelines, but it, it is a, is a really intensive process, and you want to be very , um, very accurate, very clear, and very direct, but also maintain the flexibility that you're going to need to enforce the law. That's a hard balance to, to strike.

Speaker 2:

Yeah. I, I think I agree with you and take door one, that they'll leave the guidelines in place. Um, you know, I was considering whether the, the new administration would come in and kind of start repealing guidelines, which, you know, it has happened in the past. When a new administration comes in, they look at what's there and say, oh , we don't like that. And the Biden administration, or the Biden, FTC and DOJ have withdrawn quite a lot of guidelines since they've been in, right? I mean, we had the 2020 vertical merger guidelines that the DOJ issued, you know, right at the end of , um, the last administration and , uh, sorry, the Obama administration. And, you know, they put a lot of work into those, and they were almost immediately repealed by the FTC. Um, once , um, once Lena Khan was appointed, I think , um, the DOJ kind of issued a very vague statement a , about them because , um, um, a HG Raheem had not been appointed at that point. But, you know, quickly things moved on as you, as they started working on the new , um, MOJA guidelines, which incorporate, of course, the horizontal guidelines and the vertical guidelines. And, you know, that's generated a whole lot of, you know, discussion about , uh, I think the , the term that the agencies like to use right now is geometry. You know, the geometry doesn't matter. We're just looking at competitive effects. And, and I, I think that that is the right way to think about it. You know, I don't think that you need to stratify horizontal vertical, you know, or other kinds of connections between , um, entities in order to understand whether something's going be anti-competitive or not. Um , I do think,

Speaker 3:

Though , there's ,

Speaker 2:

Yeah ,

Speaker 3:

I was gonna say, I do think this is an, an area of difference, though, that we've seen already in this administration between Republican enforcers and democratic enforcers, where , um, the , the, the , the Democratic Administration has seemed to place less value on providing this type of public guidance. They've been willing to withdraw it and leave things withdrawn and simply say the , the , that , that businesses and, and outside counsel should, should rely on the existing case law. Um, whereas the response often from Republicans, either , uh, EEE either Republican commissioners or or other commentators, has been to emphasize the, the value and the importance of this type of, of guidance so that businesses have a clear sense of what is allowed and what is not allowed. And so I do think that's an area where we are likely to see a pendulum swing, and I'd be surprised if , um, either at DOJ or FTC , uh, they're, they're willing to, to move forward without , uh, clear guidance to the business community.

Speaker 2:

Yeah, and as you said earlier, you know , guideline, the guidelines can sit there and it really becomes a question of , you know, enforcement policy and enforcement priorities. So you might have the lower concentration levels in guideline one, but you know, maybe, you know, the agency won't go into court at, you know, right around that level. They would rather, you know, go in at , at something that's a lot more significant. And I know when you talk about healthcare transactions , um, and, and you, you know, define markets, we're dealing with concentrations that are well over any , um, guideline threshold, even the 2010 guidelines, quite frankly, because they're just, it, it is naturally a more concentrated market. Um, so, you know, it may come down to the way that they're enforced. I think Commissioner Ferguson made some comments fairly recently , um, that the agencies are going to have to kind of , uh, choose cases that they can win to build credibility with the courts. Again, because , um, you know, over this period of, of the Biden administration, there have been, you know, several cases lost , um, which I think was true in the early years. But, you know, lately the FTCs been on a bit of a roll . Um , you know, they won, well, they lost a Navan case, but then they kind of won it because <laugh> , they appealed and got their stay on appeal. But just lately they won Tapestry Capri, which was in the , uh, what is it, affordable luxury handbag market. And , uh, literally yesterday , um, they , uh, won the Kroger Albertsons , um, challenge, which I know you can't talk about, but , uh, that's a, that's a fascinating case because it does, they, they, they did try to bring in some of these new ideas , um, although the court ended up deciding it on the traditional , um, horizontal overlap basis. So why don't we talk a little bit, I, I mentioned , um, um, Novant , the North Carolina case. What do you think's gonna happen with hospital merger enforcement, which was really , um, what your area of expertise was while you were at the FTC?

Speaker 3:

Yeah, that was , uh, hospital mergers w were , and , and continue to be a , a focus for the, the mergers four division , um, that I was a part of for a long time. And I , I , I think that if you look at the history of hospital merger enforcement, it really is a , a bipartisan history. There was a a a a , of course, a hospital merger retrospective that was conducted by the FTC after a string of government losses in the nineties. And in the early two thousands, it was a Republican chair , uh, Tim Muris that initiated that hospital merger retrospective. Um, but that, that hospital merger program continued through administrations and the Obama administration was very active in, in the hospital merger cases. That, that was the, the administration that brought , um, that brought the , uh, the , the ProMedica case, the Rockford case, the Hershey Pinnacle case , uh, the Advocate North Shore case. There was a , a long run of, of , um, uh, of cases brought under earned the Obama administration, and similarly under the Biden administration and, and the Trump administration too. So there , it's been a consistent , uh, uh, a consistent area of focus. And this is another place where I think you have to look at both the, the public discussion, the rhetoric around , uh, hospital merger enforcement and the, the actual enforcement actions. Um, the, the enforcement actions themselves have been very focused on local markets, on narrowly defined geographic markets with hospitals that compete head to head . And certainly the agencies have, have put forward a structural case. The FTC most , most notably, it's, it's mostly been the FTC over the last 20 years has put forward structural cases , um, that, that rely on, on market shares and market concentration. But in, in virtually every case, those market concentration statistics are also bolstered by evidence of head-to-head competition and price competition for insurers and quality competition and innovation competition, all of the hallmarks of a traditional merger case. That said, if you back up from some of the, from the enforcement activity, you do see a lot more discussion and academic work and, and speeches and articles about other types of hospital mergers and healthcare provider mergers that , um, could, could be having anti-competitive effects. There's been discussions about vertical integrations between hospitals and physicians, or hospitals and insurers or other healthcare providers and insurers and, and also different types of, of healthcare provider transactions. Uh , some <laugh> they've sometimes been termed cross market , uh, mergers that

Speaker 2:

I was gonna mention, cross market . Yeah,

Speaker 3:

Right. <laugh> , I hesitate to use that term 'cause I, I think it's a little bit misleading. I think if you really think about what the theory is behind what's been typically termed across market merger, which you're really talking about is just a bigger geographic market and competitive effects , um, in theory happening just across a bigger geographic space. But we'll, we'll stick with cross market because that's, that's what the academic literature tends to use. Um, and there's been a lot of discussion about that. There hasn't been a lot of enforcement action on that. And I think the same thing's true on labor, right? There's, there's also been a lot of discussion about the impact of hospital mergers on the labor forces that hospitals employ and hospitals in , in almost every community are huge employers. And there's been no shortage of discussion of that. And I think anybody who's been involved in hospital mergers can recognize that there's been a great deal of attention paid to the effect of hospital mergers on labor markets, but that has not yielded , um, uh, enforcement actions and certainly not standalone enforcement actions. Um, and so I think that we may see, again, a , a shift in the rhetoric, a shift in how the agencies talk about these, these mergers. But I would expect that the bread and butter type of mergers that have been merger cases that have been brought across administrations, there's no reason to think that wouldn't continue in this administration.

Speaker 2:

Yeah, I think I agree with you on that. I mean, I tracked back through , um, some of the hospital merger history, and as you say, you know, after, after all the losses through the nineties, the retrospective, you know, the, it was under Bush that , um, the FTC published the retrospective, and then they brought that Evanston action, which was really when the tide turned for the FTC. And Ken Helsinger abandoned the Helsinger Hogarty test. I don't know if you remember that <laugh>, that was a long time ago. I do. Um, then they had in Innova , um, and then during the last Trump administration, you had Jefferson, Einstein, Hackensack Meridian Englewood , um, DOJ went after Geisinger Evangelical. So it's really not , uh, a partisan issue. It it's really bipartisan, the the approach to hospitals and which makes sense, right? It's a very important , um, consumer issue. Healthcare's a huge part of our economy, and I think, you know, through the agencies, through congress, through various, you know, bodies and, and individual consumers, there are concerns about how our , how our healthcare system actually operates. Um, and, you know, what can we do to, to make things better? Um, you mentioned the labor market enforcement , uh, stuff, and I find that very interesting. You know, we've been talking a lot and the agencies have been talking a lot about how , um, you know, antitrust applies to labor markets, which are an form of input market just as much as they do to downstream markets. And, you know, you've seen discussions of, of labor market impacts, particularly impacts on nurses. Um, you know, they're, they're a very special , um, you know, specialized group of employees. Maybe they have, you know, less , uh, physical mobility. Um, and so reductions in the choice of employer can be really important for them. And I know in the lifespan care New England merger a while back , um, that was a theory that was being discussed. And I think at the time the , uh, Democrat Democratic commissioners were in the minority, but said that they would've brought the case on that basis, but didn't need to because there were other, other reasons why , um, they thought the transaction was anti-competitive. But the Rhode Island Ag actually issued a report and had a section in there finding that , um, on, on the basis of the labor market overlaps , um, that, that the transaction was very problematic. Um, that combined the two , um, healthcare organizations would represent some huge proportion of , um, nurse employment in Rhode Island. Um , unfortunately, they, they redacted out 90% of, of their decision on that point, <laugh> . But , uh, it's enough to get the gist. So, you know, I think labor , labor market enforcement is gonna continue to be something that the agencies discuss. But , uh, you know, it's, it's, it's rare that it, that it would come up on its own. Um, you know, there , there was a question of it in Penguin Random House , um, Simon and Schuster, but there we were talking about highly compensated authors. Um, we saw it a little bit in Kroger, Albertsons , um, on the basis of , um, you know, workers at the, at the two chains and their , their unions, the impact on the union. Um, but the judge there found that there wasn't really enough evidence to , um, make a decision on that point, and again, didn't need to reach it. So, you know, query how, how important that theory is , um, when it comes down to bringing a case, because if you're gonna have that kind of impact on the labor market, you've probably, you're probably having an impact on the downstream market anyway. So , um, it may not be, be necessary to , uh, to bring it on that basis.

Speaker 3:

I, I think that's, that's, that's often right. Um, but I , I , I also think that it's interesting there, there have been times where , um, Republican and democratic commissioners may have disagreed about the, the level of , um, the, the, the facts required to bring a labor count. But I do think it's remarkable that , um, there does seem to have been a consensus over , uh, uh, in this administration and, and going back to the past administration too, which is where I think that this , um, this discussion of labor markets in my memory, really, really started to take off. And, and we saw Republican , um, commissioners, Republican enforcers , uh, signal that an , an openness to and , and a , um, an acceptance that antitrust absolutely covers impacts on workers. Now, how that manifests itself in any particular case is always gonna be highly fact specific. And, and proving the elements of a , um, an an antitrust labor count can be a challenge, to say the least. But , um, from a theoretical perspective, I do think there is some convergence on antitrust application to labor. And, and interestingly , uh, commissioner Ferguson, who as you mentioned, is now , uh, has been appointed as the, the, to be the new chair of the FTC , um, issued a statement, it was in dissent , uh, last week, but, but where he, there's a sentence in that dissent where he expressly says that the , um, the , the antitrust laws , um, uh, applied to, to labor. And , and he even said that, that the commission was wise to focus its resources on protecting competition and labor markets. So I do think that's a , an interesting signal about , um, where , where , where we're headed.

Speaker 2:

Hmm , more of the same, but one thing that might change , um, is the attitudes towards private equity and healthcare. I think , um, you know, or , or maybe not. So, you know, the FTC during this administration has been really focused on the impact of private equity ownership on the healthcare system. Um, but looking at it from an antitrust point of view, I mean, clearly, you know, there are a lot of individual stories about how , um, you know, there have been very negative impacts , um, in certain cases. But, you know, the FTC seems to have made it a bit of a mission to , um, to go after private equity that is investing in the healthcare system. And I think, you know, we saw it early on in the administration when , um, I think it was a transaction involving vet clinics, so animal health, not human health , um, where the , where the agency got a consent , um, with, with a prior authorization condition as well. And , um, commissioner Wilson at the time , um, said something to the effect of, you know, your , your , she didn't necessarily disagree with the substance of, of the , um, competition analysis, but she objected to the, the language and the rhetoric in the , um, majority opinion , um, the statement that accompanied the settlement because it was just so hostile to private equity, and there didn't seem to be a need , um, in her mind that you would necessarily just focus on this business model. You , you should focus on, you know, what the competitive impacts are. Um, and, you know, we've got that case , um, that the FTC brought in Texas against US Anesthesia Partners, where they not only sued the company that was making the acquisitions and engaging in conduct that was arguably anti-competitive, but they included , um, the PE sponsor Welsh Carson as a defendant. And Lena Kahn was quite expressed that , um, she was trying to make an example of them and put it out there to private equity, put them on notice that the FTC will go after the private equity sponsors, not only , um, the portfolio companies that are , um, doing, doing the , the acquisitions. So, you know, I think that that might change. I think there might be a bit of a rollback on the , um, rhetoric around private equity ownership and, and, you know, the, the case itself, you know, the underlying facts of the case, the FTC could have gone after that and probably would go after that under any administration. It was just that overlay of, of concern about private equity, acquire private equity. So I, I , I think, and I hope that , uh, we'll see a little bit of softening and, and a bit of air coming out of the , those kind of ideas.

Speaker 3:

Yeah, I , I think this is probably the , the center of the bullseye for what we were talking about before about the, the difference between swings and rhetoric and, and how enforcement takes place. I mean, there's been, as you've said, no question about the, the, the, the public focus that the, the Biden administration's antitrust enforcers have put on private equity. Um, there's been no shortage of, of speeches and articles and, and a any other , um, way that they can get out there that they are, are focused on private equity. And, and that probably has , um, has also resulted in some , uh, resource allocation within the, the , the agencies to, to look at private equity activity. But antitrust law, and , and you alluded to this, antitrust law doesn't really take into account the, the, the business model involved, right? It's really much more focused on market structure, the impact of a, of a deal on market structure or the impact on conduct of, of, of , uh, on com competition and competitiveness of a given market. Um, that's, that's really agnostic to the, the type of business that's involved, whether it's a nonprofit or a for-profit or a private equity or a public company. Um, and, and I think when you look at the agency enforcement actions, they, they continue to be, first of all, highly PAC fact specific. They, they really dig into what is going on with this company in this industry, what specifically did they do? And what was, what was the impact? Um, and , and also to think about , um, regardless of, of whether or not there there was a , a private equity involvement or not , um, to think about what, what is the, what is the competitive effect, right? There, there might be a, again, a political spotlight on a certain type of business, but , um, the , the onus is on the agencies to, to illustrate specific competitive effects in a specific market.

Speaker 2:

So last topic, <laugh> , um, the non-compete ban. So I think everybody knows , uh, the FTC attempted to do a , an agency rulemaking to ban non-competes nationwide, and that was tied up in litigation in a number of jurisdictions. Um, and most recently , uh, the court has , uh, enjoined , um, um, the, the, the rule I , I think if, if , uh, the Democrats had won the election and were continuing, we'd probably see an appeal there. Um, so thumbs up, thumbs down, what's gonna happen to the non-compete ban

Speaker 3:

<laugh>? I , I think that's, that's a , that's a really hard question to answer , um, in , in the picture sense . Think it's so hard . <laugh> Well, I was gonna say in a big picture sense, because I th I think there's a, there's a , uh, a , a , a debate that's been started by the, by the non-compete ban about non-competes and about their role. I do think given , uh, given Commissioner Ferguson and Commissioner Holyoke's , um, dissent to, to the , uh, with , with the non-compete rule, I, I would certainly expect , um, uh, uh, chair Ferguson to, to , to pull it back, the, the, the court cases around that. And the, and the, the dissents from , um, commissioner Ferguson and Commissioner Holyoke were much more focused on the, the statutory authority of the agencies and the appropriate , um, the , the appropriate limits of, of section five of the FTC Act , um, less than the merits of non-compete clauses and the, the , the economic pros and cons of them. And, and where I was going before was, I , I, I do think that there has been a discussion that has started in a lot of different, both in state legislatures and even Congress and, and just more generally about when and if non-compete , um, non-compete provisions are appropriate. Are they, are they fair, are they appropriate? And so even if the FTC rule doesn't , um, doesn't continue , uh, I wouldn't expect that to end the debate.

Speaker 2:

Uh , absolutely. And you know, we know of several states that have , uh, either partial or complete non-compete bans. I think DC um , there's a non-compete ban and, and places where , um, state legislatures have tried to pass non-compete bans. Um, here in New York, there was one that was on the governor's desk. It got a long way and , uh, she eventually vetoed it. And there are various other states where , um, things are being introduced and as you say, it continues to be , uh, a topic of ongoing dialogue. Well , I think , I think one of the , go ahead.

Speaker 3:

I was just gonna say , I , I think one of the interesting things about the non-compete is that there are, there are at least two angles to it, right? There is the , the fairness to the worker, the fairness to the person who has signed the , the agreement, not, not to compete, but then there's also a question of a broader effect on does it allow for people to leave their, their current position and start a new competitor, start to be able to innovate. And I think those, those two angles of the debate are , are the ones that, that, that we're likely to see continue both in healthcare and in the, the , the economy more broadly.

Speaker 2:

Definitely. Well, I think , I think we've, we'll leave it there. Um, plenty more topics to talk about in, in healthcare antitrust, but , uh, we'll have to wait and see what the, what the new administration does come January 20 or shortly after. Thanks a lot for joining me, mark .

Speaker 3:

Thank you so much for having me, Lisa . This was wonderful.

Speaker 1:

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