Economics Unit 3 Db

Recent Price Fixing Case : FTC Charges Chicago expanse Doctor Groups with Price FixingPrice fixing is the collusion of two or more businesses or firms to provide their product at a said(prenominal) (fixed ) impairment . This appearance is much like the behavior of a cartel or an oligopoly . The price fixing is performed by the concerned businesses to lessen competition and to protect their bottom lines . With prices at a fixed level , the fixers are sure that they wouldn t be undercut by a third party that offers the same work at a lower toll . This is non beneficial to the consumer as the choice of a lower equal service or product is removed from his or her optionsA recent charge of price fixing was d before the FTC withstand December 29 , 2006 against several organizations that represented around 2 ,900 Chicago doctors . The FTC mission stated that Advocate Health Partners (AHP ) and different named corporations unreasonably restrained competition in violation of segmentation 5 of the FTC Act . AHP is a non-profit corporation that is called a topnotch physician-hospital organization in the health care industry . AHP s members include eight Advocate Health Care Network Hospitals . The complaint covered the activity of AHP in the period from 1995 to 2004Normally , doctors contract with HMOs and new(prenominal) third party payors to establish the rates and terms of services . Doctors normally are free to lower their prices to attract greater number of paying patients Additionally , doctors may also demean into lower priced contracts with HMOs . This will enable the HMO to reduce the cost of medical insurance for its subscribers . The contract development between doctors and HMOs is normally decided only by the doctor by himself , without collusion with other doctors . This competition results in the consumer proceedting the lowest price possibleWhat happened with AHP is that they acted as the negotiator for the doctors that they represent .

They fixed the fees for the services provided by all the doctors under the AHP system . AHP was the one to create and strengthen contracts with HMOs thus removing the privilege of the respective(prenominal) doctors to dictate their own determine terms and conditionsAnother charge in the complaint was that in 2002 , AHP alter its members contracts with good-for-naught Cross Shield of Illinois , an HMO operating in the Chicago area . In December 2001 , AHP tried to conduct a collective contract with Blue Cross . hitherto during that time , Blue Cross already held individual contracts with the individual members of AHP . To fix the situation , AHP solicited from its members agreements that allowed AHP to act as the agents of the doctors in their negotiations with Blue Cross . AHP got a and in October 1 , 2002 terminated the real agreements of the 1 ,700 members with Blue Cross . AHP then attempted to bring off a new group contract in behalf of the 1 ,700 doctors . This new group contract had a price that is 20 to 30 higher than the original contracts the individual doctors had...If you want to get a full essay, order it on our website: Orderessay

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