Discuss your reactions to the Highmark case
The plaintiff, West Penn Allegheny Health System, presented a lawsuit based on allegations of conspiracy in antitrust violations engagements against Pittsburgh central healthcare system, University of Pittsburgh Medical Center, and a dominant state insurer, Highmark. Both UPMC and Highmark served as defendants in this case. The three parties, in this case, are dominant entities in their respective industries.
In the conspiracy case, the plaintiff is to prove before a court of law with substantial evidence portraying how a defendant utilized its dominant market power to isolate the insurer, as mentioned earlier, from competitive market rivalry. The plaintiff had the constitutional authority to provide evidence for an antitrust conspiracy on the mode in which the defendants combined to safeguard each other against market competition.
Discuss your reactions to the Highmark case
The law court, to a higher degree, took a cynical perspective of the association between the foremost medical health system and the leading insurance provider. On an individual ground, a single defendant’s act would not have established a field to instigate anticompetitive conduct. Conversely, a rounded assessment of the facts and shreds of evidence presented in court gave the court a platform to base its ruling. The plaintiff brought forward satisfactory proof to overwhelm a dismissal motion. The law court discovered successions of anticompetitive conduct that revolved around conspiracy as a means of protecting a defendant’s competitive edge. In the process, the court singled out how the two defendants profited from particular market movements to indignant the plaintiff.
What do you think about the behavior of the parties?
The rivalry between UPMC and West Penn has no basis. It cannot be traced to any sensible source. Furthermore, they might be in the same sector, but their mode of competition is premature. Despite serving the same market segment, tertiary and quaternary, and being the two leading healthcare providers, it is illogical as to why both decide to team up with a familiar healthcare insurance provider.
The move UPMC took to propose a truce to Highmark was unethical. UPMC had market insecurities, therefore, to safeguard its market share and establish a healthcare monopoly. This protected UPMC against competition from West Penn, thus creating insulation in healthcare competition (West Penn Allegheny Health System, Inc. v. UPMC, 2010). Such a move cast off the rights of healthy competitiveness within an industry as shown by the subsequent raid of physicians from West Penn, shot in insurance premiums sent out by UPMC to Highmark, falsification of the financial status of West Penn, elimination of community blue low-cost insurance plan, and West Penn financial support cut off and depressed reimbursement rates.
What could have been done to avoid these issues?
Direct competitive businesses in the same industry should avoid collaborating with a single organization offering a complimentary service to their industry. Such a partnership stifles out competition between firms in an industry. It is evident from the case that a firm with a substantial power has unfair bargaining aggression, especially when negotiating for charges for a service.
Highmark should at all cost collaborating with competitive firms from the same industry. This reduces the chances of unreasonable retrained trade in the respective industry as well as increases its independent decision-making power (Findlay-Brooks, Visser & Wright, 2010).