FTC Protects Anti-Capitalist HMOs
This 2002 letter to Federal Trade Commission Secretary Don Clark challenges the FTC's prosecution of Denver-area physicians and their management consultant. The FTC, acting on behalf of HMOs and other third-party payers, imposed price controls on the market:
HMOs would never survive in a capitalist system. No consumer would voluntarily seek less service for greater administrative cost. Certainly no physician would ever work for an HMO, since it would be economically and professionally self-defeating. The only thing that allows the HMO system to continue is, not surprisingly, the government, which uses a variety of policies to promote and compel the use of HMOs. There are three primary means by which the federal government does this: (1) Medicaid and Medicare, which directly contract with HMOs to provide services at taxpayer expense; (2) direct grants and loans to HMOs; and (3) laws requiring employers to offer HMOs to employees as a “benefit.” All of these actions work to destroy the free market in health care. Nothing the respondents in this case are accused of doing even comes close to inflicting this level of damage on “competition.”
You can download the entire letter at this link.


