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Antitrust, UCL and Privacy

Competition: Winter 2017-18, Vol. 27, No. 1

THE EFFICIENCIES DEFENESTRATION: ARE REGULATORS THROWING VALID HEALTHCARE EFFICIENCIES OUT THE WINDOW?

By Jacob Snow, Ronnie Solomon, Kyle Quackenbush1

I. INTRODUCTION

Assessing efficiencies is an important part of any regulatory merger review. Efficiencies that are merger-specific and verifiable can, under the Merger Guidelines, save an otherwise anticompetitive merger. The presentation by merging parties of pro-competitive efficiencies is often referred to as an efficiencies "defense."

Healthcare in the United States is changing. Recent years have brought a significant increase in healthcare mergers, and provisions in the Patient Protection and Affordable Care Act ("Affordable Care Act") encourage integration and coordination of healthcare services. In light of these changes, some argue that regulators put too little weight on efficiencies in the healthcare context, and that the high bar set by the Merger Guidelines— requiring that efficiencies be verifiable and merger specific—is an unnecessary hindrance to healthcare mergers that will benefit the public. Does it make sense to continue to hold efficiencies to such a high bar, in the face of technological developments and pressure on healthcare entities to integrate?

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