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Comment on The Flaws in Using the Hypothetical Monopolist Test from the “Payor Perspective” in Health Care Merger Cases, by Field, Fisher, and Coglianese

Dov Rothman, David Toniatti, The Antitrust Source, December 2017

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In a recent article, The Flaws in Using the Hypothetical Monopolist Test from the ‘Payor Perspective’ in Health Care Merger Cases, Kenneth Field, Louis Fisher, and William Coglianese (Field et al.) observe that in reviewing mergers of health care providers, courts have concluded that the relevant geographic market should be defined from the perspective of the payor assembling a network of providers for a health plan. Field et al. claim this raises a host of problems when applying the “hypothetical monopolist test” to delineate the relevant geographic market. They argue that applying the hypothetical monopolist test is conceptually straightforward in a setting where sellers post prices and buyers decide whether to pay a seller’s posted price, but more complicated in the health care context because payors (buyers) and providers (sellers) negotiate to set prices for services to patients who are covered by the payors’ plans.

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