Public Hospitals and State Antitrust Immunity: Do They Really Need a Blanket?

In late October, New York's new statute extending state antitrust immunity to Nassau Health Care Corporation, a "substate" entity, was signed into law. Perceived as essential to Nassau Health's continued existence in a changing health care system, the rationalization was that substate entity hospitals have to integrate with competitors (clinical and otherwise) with whom they are not linked by the corporate form in order to survive. Specifically, this legislation unambiguously clears the way for the pending private-public partnership between Nassau Health (one medical center and five community health care centers) and North Shore-Long Island Jewish Health System (16 acute care hospitals and 400 ambulatory and physician practices on Long Island and Staten Island).

Yes, it is more difficult for free-standing acute care hospitals to benefit from scale and to capture efficiencies in the modern health care market place. But Nassau University Medical Center is a safety net facility.  In all candor, what could they bring to the table other than blanket state antitrust immunity with which to grace their potential partnerships? And why would that be so valuable to would be wooers?

Phoebe Putney may end up being the Constitutional gift that keeps on giving. Here, in response to that Supreme Court ruling, we have a New York state statute that clearly and explicitly displaces competition. It is reported to have passed both houses of the New York legislature unanimously.

Now let's see what Nassau University Medical Center really does with its immunity blanket.

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