A recent pledge by major players in the health industry to slow the growth of health costs in the U.S. may run into a significant hurdle: It could be illegal to promise to cap health spending in a coordinated way. It seems a bit counterintuitive. But here’s how an assistant attorney general put it in 1993 when the Justice Department rejected a proposal in which each drug company would limit annual average price increases to the increase in the Consumer Price Index: “Such maximum price-fixing agreements create the risk that the maximum prices will become minimum or uniform prices.” The quote appears in this morning’s New York Times . The Times also quotes a former Federal Trade

Commission official who warns that any agreement among competitors on prices would set off warning bells, even if they’re meant to create a maximum. And aside from the 1993 example, NYT cites an instance in 1978 in which the Justice Department wouldn’t promise hospitals they would avoid antitrust violations if they went forward with a “voluntary effort” to curb costs. It’s another reason why the agreement to hold costs in check may be easier said than done. Skeptics have already said the pledge is short on specifics and not much more than good PR . Image: iStockphoto

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Industry Pledge to Curb Health Costs May Run Into Legal Troubles