Counsel for a physician group retained Dr. Michael Keeley to address allegations that it had illegally obtained and exercised market power for inpatient services at local area hospitals.
Counsel for a physician group retained Dr. Michael Keeley, a senior vice president of Cornerstone Research, to address allegations that it had illegally obtained and exercised market power for inpatient services at local area hospitals.
Dr. Keeley demonstrated that because hospitals choose which physician group will serve their patients, the relevant product and geographic market must be assessed from the perspective of hospitals. He then showed that physician groups can provide both inpatient and outpatient services, and therefore the relevant product market also comprised physician groups providing outpatient services. His analysis of patient discharge data indicated that the physician group at issue had a share within this broader market that was not plausibly large enough for it to exercise market power. In addition, Dr. Keeley showed physician groups competed nationally to provide services to hospitals and thus the relevant geographic market was the entire United States.
Further, Dr. Keeley’s analysis of claims data demonstrated that the physician group did not overcharge for its services because its prices in this market were equivalent to those it charged in regions where it was not alleged to have market power.
Dr. Keeley also established that a large portion of the growth of the physician group’s market share came from hospitals actively seeking its services, rather than from acquisition. Thus, to the extent the physician group had established market power, it flowed from its offering a superior product and was not anticompetitive. The case settled before trial.