FOR IMMEDIATE RELEASE                                          AT
TUESDAY, APRIL 23, 1996                            (202) 616-2771
                                               TDD (202) 514-1888

     LOUISIANA WOMAN'S HOSPITAL AND PHO CHARGED WITH REDUCING
   COMPETITION AND DICTATING HIGHER PRICES FOR OBSTETRICAL CARE  

     WASHINGTON, D.C. -- The Baton Rouge, Louisiana Woman's
Hospital and the Woman's Physician Health Organization were
charged today by the Department of Justice with preventing
development of competition among area hospitals for inpatient
obstetrical services and with dictating higher prices for
physician services.  The Department said that this unlawful
behavior drove up costs for obstetrical care in the Baton Rouge
area. 
     In a civil suit filed in U.S. District Court in Baton Rouge,
Louisiana, the Justice Department's Antitrust Division said the
Woman's Hospital and Woman's Physician Health Organization had
used the incentive of higher fees to deter obstetricians and
gynecologists from sending patients to competing facilities.  The
Department simultaneously presented the court with a proposed
settlement that would resolve the lawsuit, if approved by the
court.  
     Anne K. Bingaman, Assistant Attorney General in charge of
the Antitrust Division, said, "This lawsuit, following on the
heels of two similar suits filed last September, demonstrates the
Justice Department's continuing resolve to prevent collusive
conduct by hospitals and physicians that increases the cost of 
health care to consumers." 
     The Antitrust Division's enforcement action:
       Stops the hospital and its doctors from preventing other
medical facilities in Baton Rouge from providing inpatient
obstetrical services.
       Prevents collusion by Woman's Hospital and its medical
staff to drive up costs for obstetrical care in Baton Rouge.  
       Fosters the development of lower-priced managed health
care plans in Baton Rouge.  
     Woman's Hospital is a specialty hospital that delivers about
94 percent of the privately insured newborns in Baton Rouge, and
has on its staff nearly every obstetrician and gynecologist in
Baton Rouge.  
     The Department said that the doctors and the hospital joined
forces to make sure that Woman's Hospital remained the primary
provider of inpatient obstetrical services in the Baton Rouge
area.  
     The complaint charges that, in 1993, Woman's Hospital formed
an alliance with nearly every obstetrician and gynecologist in
Baton Rouge serving privately-insured patients allowing the
hospital to unlawfully maintain its monopoly in inpatient
obstetrical services.
     "By reducing, and practically eliminating, competition among
the ob/gyns in Baton Rouge, and by persuading these doctors not
to admit patients to competing facilities, Woman's Hospital was
able to prevent the development of price competition among
hospitals for inpatient obstetrical care in the Baton Rouge
area," said Bingaman.
     The complaint further alleges that Woman's Hospital also
sought to eliminate competition for inpatient obstetrical
services by attempting to get General Health Inc. to agree not to
provide inpatient obstetrical care at its Health Center. 
     According to the complaint, the alliance established a
minimum fee schedule for physician services and jointly
negotiated on behalf of the doctors and the hospital with managed
health care plans.  The alliance appointed a consultant and a
committee of non-physicians to set the fees.  The resulting
ob/gyn fees were substantially higher than the fees these doctors
had received previously when they individually contracted with
the largest managed care plan in Baton Rouge.
     As required by the Antitrust and Procedures and Penalties
Act, the proposed consent decree will be published in the Federal
Register, along with the Department's competitive impact
statement.  Any person may submit written comments concerning the
proposed consent decree during a 60-day comment period to Gail
Kursh, Chief, Health Care Task Force, Antitrust Division, U.S.
Department of Justice, 325 7th Street, N.W., Room 400,
Washington, D.C. 20530.
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