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I. INTRODUCTION
The United States health care industry is crippled by waste and inefficiency. Health care costs are spiraling out of control, as Americans spent record amounts on health care while an estimated fortyone million remain uninsured.1 Health care consumes fifteen percent of the gross national product of the United States, a figure that continues to grow each year.2 These realities have prompted a national debate about the costs of health care. During its first term, the Clinton Administration espoused a managed competition3 approach to solve the health care crisis, and this approach is pervasive in the health care market today.4 Because the success of managed competition hinges upon ensuring the competitiveness of provider networks and health care plans, antitrust law will play an important role in health care reform.5
Alternative health care delivery systems have developed quickly and pervasively in response to these changes in the marketplace.6 More than ever, health care providers are pressured to join together in an attempt to reduce costs and attract business from third party payors.7 Most notably, physician-hospital organizations (PHOs),8 the newest health care organizations to develop in the last three years,9 are receiving a great deal of attention. Physicians and hospitals are currently engaged in a feeding frenzy to form PHOs, driven largely by concerns that they may be left out of the new competitive market.10 However, if the purpose of these PHOs is to enhance the economic welfare of the provider participants by effectively eliminating compe- tition to gain market power, they risk violating federal antitrust laws. Antitrust laws serve to foster competitive markets free of "economic restraints that encumber the system."11
Although the antitrust laws are intended to deter only anticompetitive activities, health care providers argue that uncertainty in antitrust enforcement actually chills the formation of beneficial collaborative arrangements, including PHOs.12 The conflict between the medical community and the agencies enforcing the federal antitrust laws has come to a head in the recent challenges of several PHOs by the Department of Justice (DOJ).13 These challenges effectively opened the door for health care providers to claim that such actions justify reform. Consequently, reform occurred in the form of revised guidelines offered by antitrust enforcement agencies, and this Comment analyzes the impetus for these reforms. In doing...