For Your Data Cascade Wellness V. Peacehealth Example Brief Summary
August 31, 2019
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Cascade Health v. Peacehealth case brief summary
FACTS
PeaceHealth as well as McKenzie (Cascade) were the solely ii hospitals inwards Lane County (the jury determined geographical market) providing main as well as secondary needlelike assist services (common services similar setting bones), the relevant production market. PeaceHealth was the dominant provider of third assist (i.e., invasive cardiovascular surgical operation as well as intensive neonatal care), belongings about 90% of third services as well as providing 75% of main as well as secondary assist services. McKenzie alleged that PeaceHealth offered bundled discounts on third services if insurers made PeaceHealth their sole provider of all services.
FACTS
PeaceHealth as well as McKenzie (Cascade) were the solely ii hospitals inwards Lane County (the jury determined geographical market) providing main as well as secondary needlelike assist services (common services similar setting bones), the relevant production market. PeaceHealth was the dominant provider of third assist (i.e., invasive cardiovascular surgical operation as well as intensive neonatal care), belongings about 90% of third services as well as providing 75% of main as well as secondary assist services. McKenzie alleged that PeaceHealth offered bundled discounts on third services if insurers made PeaceHealth their sole provider of all services.
DISCUSSION
The Court considered the appropriate legal measure for bundled discounts as well as selected a “discount attribution” measure that was distinct from the LePage standard. Consequently, the courtroom vacated the judgment as well as remanded for consideration nether the novel standard.
- All insurers who purchased all services from PeaceHealth received lower reimbursement rates than those insurers who purchased third services from PeaceHealth as well as at to the lowest degree some services from McKenzie.
Legal Considerations
- The “discount attribution” examination requires that the full discount the package provides (compared to the essence of the prices of all private goods) must hold upwards applied to the competitive good. If the full discount takes the toll of the competitive proficient below its average variable cost, the bundling is anticompetitive.
NOTES
- The Court doesn't appear to hold upwards doing whatsoever recoupment analysis, although it looks unopen plenty to predatory pricing to require some price-cost comparison.
- The examination isn’t almost every bit Π-friendly every bit Le Page exactly is non almost every bit Δ-friendly every bit Brooke Group.
If the courts were to follow Cascade, nosotros would induce got 3 dissimilar tests:
- Predatory pricing
- Non-price exclusion
- Bundled discounts