FTC Staff Comment Regarding Amendments to the Minnesota Government Data Practices Act Regarding Health Care Contract Data, Which Would Classify Health Plan Provider Contracts As Public Data

UNITED STATES OF AMERICA
Federal Trade Commission
WASHINGTON, D.C. 20580
Office of Policy Planning
Bureau of Competition
Bureau of Economics
June 29, 2015
The Honorable Joe Hoppe
Minnesota House of Representatives
543 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
Saint Paul, Minnesota 55155
The Honorable Melissa Hortman
Minnesota House of Representatives
237 State Office Building
100 Rev. Dr. Martin Luther King Jr. Blvd.
Saint Paul, Minnesota 55155
Re: 	Amendments to the Minnesota Government Data Practices Act Regarding Health
Care Contract Data
Dear Representatives Hoppe and Hortman:
The staffs of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Competition, and Bureau of Economics1 (collectively, “FTC staff”) appreciate the opportunity to
respond to your invitation for comment regarding the potential competitive impact of the
recently enacted (but not yet fully implemented) amendments to the Minnesota Government Data
Practices Act (“MGDPA”), which would classify health plan provider contracts as public data.2
FTC staff recognize the laudable goals of the MGDPA, including improving government
accountability via increased transparency with respect to the use of public funds in government
contracting.3 Transparency regulation targeted to provide consumers with relevant information
about the health care products and services they are buying, including cost information, has been
enacted in 28 states.4 While these laws can be procompetitive, the recent amendments to the
MGDPA may require public health plans to publicly disclose competitively sensitive
information, including information related to price and cost.5 Such disclosure may chill
competition by facilitating or increasing the likelihood of unlawful collusion,6 and may also
undermine the effectiveness of selective contracting by health plans, which serve to reduce
health care costs and improve overall value in the delivery of health care services in Minnesota.7
This risk of such harm is especially great if this information is accessible to competing health
care providers, and in highly concentrated markets where competition among providers is
already limited.8
Therefore, FTC staff generally concur with the economic impact analysis set forth in the
Minnesota Department of Human Services report, which concluded that “classifying plan

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provider contracts as public data would offer little benefit but could pose substantial risk of
reducing competition in health care markets.”9 To safeguard against these and other potential
harms, we respectfully urge the Minnesota legislature to consider whether limiting transparency
to the types of information important to consumers might achieve the beneficial goals of the
MGDPA while mitigating the risk of harm to competition and consumers. We recommend an
approach that focuses on disclosing the kinds of data that are most useful to consumers when
selecting health care services and providers, while minimizing the disclosure of information that
is more likely to facilitate coordination or collusion among competitors.
I. 	INTEREST AND EXPERIENCE OF THE FTC
The FTC is an independent agency charged with maintaining competition and
safeguarding the interests of consumers.10 Competition benefits consumers through lower prices,
higher quality products and services, improved access to services, and greater innovation. The
agency protects competition through its enforcement and advocacy work. For several decades,
the FTC has investigated the competitive effects of restrictions on the business practices of
health care providers. The FTC and its staff have issued reports and studies regarding various
aspects of the health care industry.11 The FTC also often provides input to federal and state
policymakers on the competitive implications of proposed laws and regulations affecting health
care markets.12
The FTC and its sister agency, the U.S. Department of Justice’s Antitrust Division
(collectively, “the Agencies”), have developed policy statements on antitrust enforcement related
to price information exchanges in health care markets. In general, the Agencies will not
challenge the exchange of prices for health care services if the following conditions are satisfied:
1. 	the survey is managed by a third-party (e.g., a purchaser, government agency,
health care consultant, academic institution, or trade association);
2. 	the information provided by survey participants is based on data more than
three-months old; and
3. 	there are at least five providers reporting data upon which each disseminated
statistic is based, no individual provider’s data represents more than twenty-
five percent on a weighted basis of that statistic, and any information
disseminated is sufficiently aggregated such that it would not allow recipients
to identify the prices charged or compensation paid by any particular
provider.13
The conditions that must be met for an information exchange among providers to fall
within the antitrust safety zone are intended to ensure that an exchange of price or cost data is not
used by competing providers for discussion or coordination of provider prices or costs. They
represent a careful balancing of a provider’s individual interest in obtaining information useful in
adjusting the prices it charges in response to changing market conditions against the risk that the

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exchange of such information may permit competing providers to communicate with each other
regarding a mutually acceptable level of prices for health care services.14
In previous letters and comments, FTC staff have addressed the risks of broad
information sharing in health care markets. For example, in a prior letter regarding proposed
state regulations that would have imposed disclosure requirements on compensation and fees
paid for pharmacy benefit manager (“PBM”) services, we expressed concern that such public
disclosures of information could reduce competition and increase prices to consumers.15
II. 	FACTUAL BACKGROUND REGARDING AMENDMENTS TO THE MGDPA
As described in your letter, the MGDPA is an “open records” law, the primary purpose of
which is to provide greater accountability of government activities through public access to
government data, pursuant to Freedom of Information Act requests.16 Under the Act, “[a]ll
government data collected, created, received, maintained or disseminated by any government
entity shall be public unless classified . . . as nonpublic or protected nonpublic, or with respect to
data on individuals, as private or confidential.”17
The recent amendments would expand the MGDPA to cover all data collected by health
maintenance organizations, health plans, and other health services vendors contracting with the
State of Minnesota to provide health care services for Minnesota residents.18 Specifically, the
confidential terms and conditions of health plans’ contracts with health care providers, including
fees and reimbursement amounts, could become subject to public disclosure.19 The Minnesota
legislature exempted the production of any data related to public health plans, as well as health
service vendor contracts with the state of Minnesota, until June 30, 2015. The stated purpose of
this delayed enactment was to provide time for the Commissioner of the Minnesota Department
of Human Services to conduct a study and submit a report on the public policy issues relating to
application of the statute to the public health plans and the economic impact on the health care
market.20 That study concluded that classifying plan provider contracts as public data “would
offer little benefit but could pose substantial risk of reducing competition in health care
markets,” 21 including by facilitating tacit collusion among competitors and disincentivizing
provider discounts, thereby driving up prices to the level of the high-paying consumer.
The potential scope and impact of the amendments are broad. Minnesota provides health
care services to more than 1.1 million low-income, disabled, and senior Minnesotans through
programs jointly funded by the State and the federal government, including Medical Assistance
(Medicaid) and MinnesotaCare, at an annual cost of over $9.8 billion.22 The State contracts with
eight managed care health plans, including five health-maintenance organizations (“HMOs”) and
three county-based purchasing plans (“CBPs”) (collectively, “the Health Plans”). When the
current exemption expires on June 30, 2015, it appears that the amendment will make available
for public disclosure a wide range of confidential information about the Health Plans, including
the terms of agreements they have reached with health care providers. For example, the Health
Plans may be required to disclose financial reports (i.e., income and expense reports, utilization
reports, administrative spending data, third-party liability information and payments to providers
by category of service) and patient encounter data (i.e., recipient and provider information, dates

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of service, procedure and diagnosis codes, and the amount paid for services) for all patients
covered by the Plans.23 In addition, the Health Plans may be required to disclose data from their
subcontractor agreements with health care providers, including pricing information, provider
reimbursement rates, salaries, payment methods, and rebate or discount information.
III. 	ANALYSIS OF THE POTENTIAL COMPETITIVE IMPACT OF THE
AMENDMENTS TO THE MGDPA
Many types of information exchanges serve legitimate purposes and do not violate the
antitrust laws.24 The Agencies typically are more concerned when information exchanges or
disclosures promote the sharing of sensitive information among competitors. This may facilitate
their ability to coordinate or collude to fix prices, allocate markets, or engage in other conduct
that harms competition. As explained below, FTC staff believe the MGDPA amendments may
promote a level of transparency that creates a significant risk of anticompetitive harm, and a
level that may be greater than needed to satisfy the State’s legitimate policy goals, particularly
given that Minnesota, through its all-payer claims database, may provide consumers with the
types of detailed service-level cost and quality data needed to make informed decisions about
health care plans. Meanwhile, it is unclear whether the disclosures mandated by the MGDPA
amendments would give consumers sufficiently useful information to generate benefits that
would outweigh the risk of harm to competition.
In particular, FTC staff are concerned that the amendments likely would lead to public
disclosure of fees, discounts, and other pricing terms that typically are negotiated in confidence
between health care providers and health plans. Disclosure of these types of information among
competing providers likely would undermine the effectiveness of selective contracting, a key
mechanism used by health plans to drive down health care costs and improve overall value in the
delivery of health care services.
A. 	Increased Transparency May Benefit Health Care Consumers by Promoting
More Informed Decision Making in a Competitive Marketplace, If The Right
Kinds of Information Are Disclosed
Studies show that consumers benefit from information about the relative costs and quality
of health care providers and the services they provide.25 Increased access to this information not
only helps consumers become better health care shoppers, but also spurs greater competition
among providers on price and quality dimensions.26 As Dr. Paul Ginsburg explained before the
U.S. Senate Committee hearing:
[C]onsumers should know more about the products and services they are buying
and what they cost, even in situations where someone else is paying. Some of the
interest in price transparency on the part of policy makers reflects this important
shared value. But the chief goal of price transparency initiatives is to encourage
competition among providers on the basis of both price and quality of care. To the
extent that consumers choose higher-value providers, they will save money and
get higher-quality care. And, if enough consumers act on the basis of price and

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quality information, providers will feel significant market pressure to reduce
prices and increase the quality of care. Such a market level effect will benefit all
who use and pay for care.27
To be most meaningful, price information should reflect an individual consumer’s desired health
care coverage—including specific out-of-pocket expenditures for specific procedures and
services—so that the consumer can make informed decisions when selecting a provider or
choosing among treatment options.28 Moreover, as the above-quoted testimony from Dr.
Ginsburg implies, consumers cannot adequately evaluate price information without considering
quality; that is, information on price alone is likely to be less helpful to consumers when
selecting many procedures and services. Presenting information in a format and medium that is
understandable to consumers poses significant challenges.
We therefore encourage the Minnesota legislature to consider the extent to which the
MGDPA amendments will lead to disclosure of the kinds of information most likely to help
consumers harness the benefits of competition. For example, the Minnesota legislature should
consider whether price transparency, standing alone, is likely to be sufficient to control spending
and improve quality.
As a general matter, inherent uncertainties surround information in health care markets.29
Consumers rarely have as much information as providers about their conditions and treatment
alternatives. This asymmetry may hamper traditional market forces of supply and demand, which
may lead to inefficient distribution of services.30
Moreover, in order to counter existing information asymmetries, consumers need
information about future prices and coverage. Consumers typically become aware of their health
care costs after receiving care, such as when they receive an explanation of benefits from their
insurer or a bill from their provider—in other words, when the information is no longer useful to
evaluate prospective choices. Health care price and quality information that is transparent to
consumers before they receive health care services is far more likely to be useful to them.
Specifically, it is more likely to reduce consumers’ search costs, allow for more informed
comparison-shopping among health care providers and health plans, and help them in
anticipating their out-of-pocket health care costs.31 The ability to assess the anticipated cost of
care is especially important due to the increased prevalence of high-deductible health plans and
other forms of consumer cost sharing.32 These factors not only affect a consumer’s current
expenditures, but also influence the extent to which a consumer may bear future costs from poor
health care choices or worse outcomes.33
Inadequate information transparency is just one factor that may hinder the efficient
allocation of high quality medical care. In a 2011 study on transparency in health care markets,
the U.S. Government Accountability Office noted several factors that make it difficult for
consumers to obtain accurate price and quality information for health care services before
selecting and receiving medical care, including: (1) the difficulty of predicting necessary health
care services in advance; (2) billing from multiple providers in and out of network; (3) the
variety of insurance benefit structures; and (4) contractual obligations that prevent insurers and
providers from making their negotiated rates available to the public.34 At the February 2014 FTC
workshop, Examining Health Care Competition, participants discussed the importance of price

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and quality transparency, but noted that the effectiveness of price transparency depends critically
on the intended recipient of the information, the context in which the information is being
shared, and how the information is presented.35
FTC staff are aware of numerous ongoing price and quality transparency efforts, at both
the state36 and federal level.37 These efforts are focused on ameliorating informational
asymmetries and aligning financial incentives to empower consumers to make better choices.38
Several states, including Minnesota, have enacted mandatory or voluntary all-payer claims
databases that compile the kinds of detailed service-level cost and quality data that are most
useful to consumers.39 We believe that there are superior means of providing consumers with
needed information without the risk to the competitive process posed by classifying health plan
provider contracts as public data.
B. 	Potential Anticompetitive Risks of Data Transparency
Regardless of whether health care consumers in fact find greater transparency of price
and quality information to be useful, health care providers may find increased access to each
other’s prices and other competitively sensitive information to be quite useful. While some uses
could be competitively neutral, there is a significant risk that competing providers could use this
information in an anticompetitive manner to the detriment of health care consumers, public
health plans, and the State itself. Notably, disclosure of competitively sensitive information may
enable providers to determine whether their pricing is above or below their competitors’ prices,
to monitor the service offerings and output of current or potential competitors, and to increase
their leverage in future contract negotiations. This risk increases in markets with fewer providers.
Therefore, we urge the Minnesota legislature to consider the extent to which the MGDPA
amendments might facilitate precisely those types of information exchanges most likely to raise
antitrust concerns.
1. 	Information Exchanges May Increase the Likelihood of Coordination
or Collusion among Competitors
The MDHS Report warns that, due to high levels of concentration in Minnesota health
care markets, “disclosure [of competitively sensitive information] may reduce the incentive for
all providers to offer low prices and may facilitate collusion among providers.”40 FTC staff have
expressed this same concern about increased prices bid by providers after price transparency in
several previous advocacies regarding price transparency regulations by state and federal
entities.41
As a general matter, several factors affect the likelihood that the disclosure of firm-
specific competitively sensitive information—such as prices, costs, output, and contract terms—
will result in coordination or collusion among competitors. These factors include whether there
are a relatively small number of competitors in a given market42 and the ability of those few
competitors to accurately monitor each other’s transactions.43 The Agencies’ information
exchange guidelines explain that market concentration is an important barometer in gauging the
level of antitrust concern associated with increased transparency.44 The MDHS Report concludes
that the hospital markets in Minnesota are highly concentrated, such that increased information

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exchanges among competitors could facilitate the exercise of market power and exacerbate
coordination or collusion.45
Thus far, empirical evidence regarding the competitive effects of these types of price
disclosures in selective contracting in health care markets is limited;46 however, several
empirical studies of other industries have shown transparency of prices and other competitively
sensitive information to be associated with higher prices.47 These studies suggest a degree of
caution may be warranted in Minnesota, given that the State’s health care markets exhibit many
of the risk factors typically associated with harmful effects from coordination or collusion,
including: (1) a limited number of market participants; (2) high entry barriers; (3) infrequent
entry or expansion; (4) high market share of some market participants; (5) reliance on the same
providers to bid on the same or similar contracts on a regular basis; and (6) a steady or increasing
rate of demand for services.
2. 	Broad Transparency May Impede the Ability of Health Plans to
Selectively Contract with Health Care Providers
There is substantial risk that greater price transparency in concentrated health care
markets may impede, rather than enhance, the ability of the Health Plans in Minnesota to
selectively contract with health care providers and to negotiate lower reimbursement rates.48 The
MGDPA amendments, once made effective, would likely require the public disclosure of the
Health Plans’ proprietary business information, including plan structure and contracted fee
schedules. If hospitals, doctors, PBMs,49 group purchasing organizations (“GPO”),50 and other
suppliers of medical products and services know the precise details of prices, rebates, and
discount arrangements offered by their competitors to the Health Plans, providers’ incentives to
agree to negotiated discounts may be lessened. The potential for price increases by hospitals,
caused by the chilling of competition due to price transparency, were discussed at the recent FTC
health care workshop. For example, one panelist stated:
[L]ow brand name hospitals who are typically paid less are now able to see how
much the high brand name hospitals are being paid. The low brand name hospitals
actually have a new tool to drive up their payment rates. So you actually have an
upward pressure in payment from price transparency.51
In a selective contracting environment where health care providers do not know each other’s
prices, providers are more likely to bid aggressively – offering lower prices – to ensure they are
not excluded from selective networks, because exclusion could substantially decrease their
service volumes and revenues. In contrast, if providers have better knowledge regarding each
other’s prices, they will not need to bid as aggressively to ensure network inclusion. The lower-
priced providers, in particular, are likely to bid higher than they would have otherwise, and
overall prices are likely to go up as a result of this reduced price competition. Therefore,
unmitigated data disclosures could ultimately raise the prices that Minnesota consumers pay for
health care services.52
3. 	Mandatory Disclosures May Have a Chilling Effect on Willingness to
Contract with the State

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Mandatory disclosure of price, financial, and other confidential business information by
entities that contract with the State may reduce the willingness of those entities to enter into such
contracts.53 For example, providers for whom state contracts represent a small percentage of
their output may find that it makes sense to curtail further state contracts rather than forfeit
confidentiality of their fees and other sensitive information.54
IV. 	CONCLUSION AND RECOMMENDATIONS
We recognize the legitimate public policy goal of an open government, leading to the
enactment of laws designed to ensure public access to records of government bodies at all levels,
including state health plan contracts. Transparency regulations aimed at providing consumers
with information about health care quality and costs can be procompetitive and have been
enacted in 28 states. However, given the concomitant risk of significant anticompetitive harm
from information-sharing among competitors, we urge the Minnesota legislature to carefully
weigh the benefits and costs of the MGDPA amendments requiring the disclosure of confidential
terms in health care services contracts.
In particular, we encourage the Minnesota legislature to consider which types of
information are likely to be the most useful to Minnesota health care consumers as they compare
and select health care providers and services—such as actual or predicted out-of-pocket
expenses, co-pays, and quality and performance comparisons of plans or providers. At the same
time, we urge caution in mandating public disclosure of plan specifics and negotiated fee
schedules between the Health Plans, hospitals, and physician service entities, which may harm
competition and consumers by facilitating coordination or outright collusion on prices or other
terms, especially in highly concentrated markets.

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We appreciate the opportunity to provide our input on the competitive implications of the
MGDPA amendments. We hope our comments will be of assistance as you consider these issues.
Respectfully submitted,
Marina Lao, Director
Office of Policy Planning
Deborah L. Feinstein, Director
Bureau of Competition
Francine Lafontaine, Director
Bureau of Economics
1 This staff letter expresses the views of the Federal Trade Commission’s Office of Policy Planning, Bureau of
Competition, and Bureau of Economics. The letter does not necessarily represent the views of the Federal Trade
Commission or any individual Commissioner. The Commission, however, has voted to authorize staff to submit
these comments.
2 Letter from the Hon. Joe Hoppe and the Hon. Melissa Hortman, Minn. House of Representatives, to Deborah
Feinstein, Director, Bureau of Competition, Federal Trade Commission (Jan. 16, 2015) [hereinafter
Hoppe/Hortman Letter]. See M INN. STAT. § 13.387 (2014) (amending Minnesota Government Data Practices Act,
M INN. STAT. § 13.05, subdiv. 11 (1974)), available at https://www.revisor.mn.gov/statutes/?id=13.05.
3 The fundamental purpose of government transparency laws is to “inform[] citizens about ‘what their government
is up to.” McDonnell Douglas Corp. v. U.S. Dep’t of Air Force, 375 F.3d 1182, 1193 (D.C. Cir. 2004) (citation
omitted). The MGDPA, “together with statutes such as the Open Meeting Laws, . . . the campaign finance and
public disclosure laws, . . . and public proceedings of the judiciary, are part of a fundamental commitment to
making the operations of our public institutions open to the public.” Prairie Island Indian Cmty. v. Minn. Dep’t of
Pub. Safety, 658 N.W.2d 876, 883−84 (Minn. Ct. App. 2003).
4 See Anna D. Sinaiko & Meredith B. Rosenthal, Increased Price Transparency in Healthcare – Challenges and
Potential Effects, 364 NEW E NG. J. M ED. 891, 892-93 (2011). This article concludes that:
Price-transparency initiatives will have to address several major challenges if they are to have the
desired effect. First, it’s not clear which prices to report: although average unit costs . . . are the
most readily available, personalized, episode-level costs would be more meaningful to patients
. . . . Moreover, meaningful information about quality must be delivered alongside prices so that
patients can make decisions by comparing care choices on both dimensions.
For list of state legislation requiring health care price transparency, see N AT ’ L CONFERENCE OF STATE
LEGISLATURES, T RANSPARENCY AND D ISCLOSURE OF H EALTH COSTS AND P ROVIDER P AYMENTS: STATE ACTIONS
(updated Jan. 2015), available at http://www.ncsl.org/research/health/transparency-and-disclosure-health-
costs.aspx#Legislation. See infra note 36.

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5 We do not express an opinion on the threshold question of statutory interpretation as to what the MGDPA
amendments would require Health Plans to disclose.
6 See, e.g., FED. T RADE COMM ’N & U.S. D EP’ T OF J USTICE , A NTITRUST G UIDELINES FOR COLLABORATIONS AMONG
COMPETITORS 15 (2000) [hereinafter COLLABORATION G UIDELINES], available at https://www.ftc.gov/sites/
default/files/attachments/press-releases/ftc-doj-issue-antitrust-guidelines-collaborations-among-
competitors/ftcdojguidelines.pdf. Those guidelines state:
Other things being equal, the sharing of information relating to price, costs, output, or strategic
planning is more likely to raise competitive concern than the sharing of information relating to less
competitively sensitive variables. Similarly, other things being equal, the sharing of information
on current operating and future business plans is more likely to raise concerns than the sharing of
historical information.
See also U.S. D EP’T OF J USTICE & FED. T RADE COMM ’N, STATEMENTS OF ANTITRUST E NFORCEMENT P OLICY IN
H EALTH C ARE , Statement 6 (1996), available at https://www.ftc.gov/sites/default/files/attachments/competition-
policy-guidance/statements_of_antitrust_enforcement_policy_in_health_care_august_1996.pdf [hereinafter
H EALTH C ARE STATEMENT 6].
7 See FED. T RADE COMM ’N STAFF LETTER TO CENTERS FOR M EDICARE & M EDICAID SERVICES, D EP’T OF H EALTH
AND H UMAN SERVICES 5-6 (Mar. 7, 2014) (citing Alan T. Sorensen, Insurer Hospital Bargaining: Negotiated
Discounts in Post Deregulation Connecticut,51 J. I NDUS. ECON. 469 (2003); Vivian Y. Wu, Managed Care’s
Price Bargaining with Hospitals, 28 J. H EALTH E CON. 350 (2009); Michael G. Vita, Regulatory Restrictions on
Selective Contracting: An Empirical Analysis of ‘Any-Willing-Provider’ Regulations, 20 J. H EALTH E CON. 955
(2001)), available at https://www.ftc.gov/system/files/documents/advocacy_documents/federal-trade-
commission-staff-comment-centers-medicare-medicaid-services-regarding-proposed-
rule/140310cmscomment.pdf [hereinafter CMS LETTER ].
8 See supra note 6.
9 H EALTH C ARE ADMIN., M INN. D EP’T OF H UMAN SERVICES, H EALTH C ARE CONTRACTING AND THE M INNESOTA
G OV’ T D ATA P RACTICES ACT 4 (2015), available at http://mn.gov/dhs/images/Health_Plan_Data_Report.pdf
[hereinafter MDHS REPORT].
10 Federal Trade Commission Act, 15 U.S.C. § 45 (2006).
11 See generally FED. T RADE COMM ’N, COMPETITION IN THE H EALTH C ARE M ARKETPLACE ,
https://www.ftc.gov/tips-advice/competition-guidance/industry-guidance/health-care.
12 See FTC STAFF COMMENT TO THE ERISA ADVISORY COUNCIL (Aug. 19, 2014), available at https://www.ftc.gov/
system/files/documents/advocacy_documents/ftc-staff-comment-erisa-advisory-council-u.s.department-labor-
regarding-pharmacy-benefit-manager-compensation-fee-disclosure/140819erisaadvisory.pdf [hereinafter ERISA
COMMENT]; FTC STAFF LETTER TO THE H ON. J AMES SEWARD CONCERNING N.Y. SENATE B ILL 58 ON P HARMACY
B ENEFIT M ANAGERS (PBM S) (Mar. 31, 2009), available at https://www.ftc.gov/sites/default/files/documents/
advocacy_documents/ftc-staff-comment-honorable-james-l.seward-concerning-new-york-senate-bill-58-
pharmacy-benefit-managers-pbms/v090006newyorkpbm.pdf [hereinafter NY LETTER ]; FTC STAFF LETTER TO
THE H ON. N ELLIE P OU CONCERNING N.J. A.B. A-310 TO REGULATE CONTRACTUAL RELATIONSHIPS B ETWEEN
PBM S AND H EALTH B ENEFIT P LANS (Apr. 17, 2007), available at https://www.ftc.gov/sites/default/files/
documents/advocacy_documents/ftc-staff-comment-hon.nelie-pou-concerning-new-jersey.b.310-regulate-
contractual-relationships-between-pharmacy-benefit-managers-and-health-benefit-plans/v060019.pdf [hereinafter
NJ LETTER ]; CMS LETTER , supra note 7. But see LETTER FROM COMMISSIONER J ULIE B RILL TO ERISA ADVISORY
COUNCIL (Aug. 19, 2014) [hereinafter B RILL D ISSENT LETTER ] (dissenting due to concerns that staff’s conclusions
were based on outdated information), available at https://www.ftc.gov/system/files/documents/public_statements/
579031/140819erisaletter.pdf.
13 See H EALTH C ARE STATEMENT 6, supra note 6, at 50.
14 See id.

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15 See ERISA COMMENT, supra note 12; NY LETTER , supra note 12; NJ LETTER , supra note 12; BRILL D ISSENT
LETTER , supra note 12.
16 See Hoppe/Hortman Letter, supra note 2.
17 M INN. STAT. § 13.03, subdiv. 1; see M INN. STAT. § 13.37.
18 M INN. STAT. § 13.387.
19 See supra note 5.
20 See MDHS REPORT, supra note 9, at 4.
21 Id.
22 Id. at 7.
23 See id. at 14. This comment is limited to competition concerns. We note, however, that disclosure of some of this
information may raise privacy concerns as well. For the purposes of this comment, we assume that the Minnesota
legislature and regulators will appropriately take privacy into account.
24 See COLLABORATION G UIDELINES, supra note 6, at 15; H EALTH C ARE STATEMENT 6, supra note 6.
25 See U.S. G OV’T ACCOUNTABILITY O FFICE , GAO-11-791, H EALTH C ARE P RICE T RANSPARENCY: M EANINGFUL
P RICE I NFORMATION IS D IFFICULT FOR CONSUMERS TO O BTAIN P RIOR TO RECEIVING C ARE 2 (2011), available at
http://www.gao.gov/assets/590/585400.pdf [hereinafter GAO REPORT]. See generally Fed. Trade Comm’n
Workshop, Examining Health Care Competition, available at https://www.ftc.gov/news-events/events-
calendar/2014/03/examining-health-care-competition.
26 See Christopher Whaley et al., Association Between Availability of Health Service Prices and Payments for these
Services, 312 JAMA 1670, 1670−76 (2014).
27 High Prices, Low Transparency: The Bitter Pill of Health Care Costs: Hearing Before the S. Comm. on Finance,
113th Cong. 8 (2013) (statement of Paul B. Ginsburg, Ph.D., Center for Studying Health System Change and
National Institute for Health Care Reform), available at http://www.finance.senate.gov/imo/media/doc/
Ginsburg%20June%2018%20Senate%20Finance%20Hearing%20Transparency.pdf.
28 See, e.g., Sze-jung Wu et al., Price Transparency for MRIS Increased Use of Less Costly Providers and Triggered
Provider Competition, 33 H EALTH A FF. 1391, 1391−98 (2014), available at http://content.healthaffairs.org/
content/33/8/1391.long.; see also H EALTHCARE F INANCIAL M ANAGEMENT ASS ’N, RECOMMENDATIONS FOR
I MPROVING P RICE T RANSPARENCY, RECOMMENDATION 3 (Mar. 10, 2015), available at http://www.hfma.org/
content.aspx?id=28797; GAO REPORT, supra note 25, at 2.
29 See Kenneth J. Arrow, Uncertainty and the Welfare Economics of Medical Care, 53 AM . ECON. REV. 941 (1963)
(arguing that medical care markets, unlike markets for other infrequently purchased goods, such as cars or houses,
are characterized by extremely high levels of uncertainty about the consequences of purchasing particular goods
or services for any particular patient).
30 See, e.g., Selma J. Mushkin, Toward a Definition of Health Economics, 73 P UB . H EALTH REP. 785, 787 (1958);
See Arrow, supra note 29, at 951 (“Because medical knowledge is so complicated, the information possessed by
the physician as to the consequences and possibilities of treatment is necessarily very much greater than that of the
patient, or at least so it is believed by both parties.”); Deborah Haas-Wilson, Arrow and the Information Market
Failure in Health Care: The Changing Content and Sources of Health Care Information, 26 J. H EALTH P OL.
P OL’Y & L. 1031 (2001).
31 See generally GAO REPORT, supra note 25.
32 Id. at 2; Uwe E. Reinhardt, Health Care Price Transparency and Economic Theory, 312 JAMA 1642, 1642
(2014) (“[C]onsumer-directed health care so far has led the newly minted consumers of US health care (formerly
patients) blindfolded into the bewildering US health care marketplace, without accurate information on the prices
likely to be charged by competing organizations or individuals that provide healthcare or on the quality of these
services.”).

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33 Economists argue that poor choices in selecting health care risk greater consumer harms than in most other
markets because in addition to high prices and poor quality, consumers face the increased risk of lost income,
increased pain, suffering, and death. See Arrow, supra note 29, at 949.
34 GAO REPORT, supra note 25, at 12. All these factors make estimating costs challenging. In the survey, a knee
replacement estimate from 19 hospitals ranged in price from $33,000 to $101,000. Id.
35 Fed. Trade Comm’n Workshop, Examining Health Care Competition, available at https://www.ftc.gov/news-
events/events-calendar/2014/03/examining-health-care-competition. In his most recent study, Dr. Ginsburg
recommends three specific narrowly-tailored price transparency policy initiatives:
• 	Use of state all-payer health claims databases (“APCDs”) to report hospital prices to make employers
more aware of price differences and realize savings from narrower provider networks and tiered
benefits, by increasing pressure on high-price hospitals to reduce or justify their prices, and by
informing the discussion of policy options for controlling costs;
• 	Require electronic health record systems to provide prices to physicians when ordering diagnostic tests
so that they are aware of the cost of the services they are ordering; and
• 	Require all private health plans to provide personalized out-of-pocket expense information to
enrollees.
See Chapin White et al., Healthcare Price Transparency: Policy Approaches and Estimated Impacts on Spending
(May 2014), available at http://www.westhealth.org/wp-content/uploads/2015/05/Price-Transparency-Policy-
Analysis-FINAL-5-2-14.pdf.
36 National Conference of State Legislatures, Transparency and Disclosure of Health Costs and Provider Payments:
State Actions, (updated Jan. 2015), available at http://www.ncsl.org/research/health/transparency-and-disclosure-
health-costs.aspx. The 28 states that have enacted health care cost transparency legislation include Arizona,
Arkansas, California, Colorado, Delaware, Florida, Illinois, Indiana, Kentucky, Maine, Massachusetts, Minnesota,
Missouri, Nebraska, Nevada, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South
Dakota, Texas, Utah, Virginia, Vermont, Washington, and Wisconsin.
37 At the federal level, the U.S. Department of Health & Human Services provides price and quality information for
health plans competing in the health exchanges marketplace. Likewise, the CMS Health Care Consumer Initiative
also encourages consumer access to price and quality information. CMS is committed to increasing access to its
Medicare claims data through the release of de-identified data files available for public use. On April 9, 2014,
CMS released physicians’ Medicare claims data—including billed charges and total payments—to the public.
This unprecedented release of data was done to empower patients with a new way to make decisions about their
health care. See Centers for Medicare and Medicaid Services, Medicare Provider Utilization and Payment Data:
Physician and Other Supplier (updated June 1, 2015), http://www.cms.gov/Research-Statistics-Data-and-
Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/Physician-and-Other-Supplier.html; see
also Centers for Medicare and Medicaid Services, Basic Stand Alone (BSA) Medicare Claims Public Use Files
(PUFs) (updated Feb. 28, 2013), https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-
and-Reports/BSAPUFS/index.html?redirect=/BSAPUFS/03_Inpatient_Claims.asp.
38 Price transparency was encouraged in 2006 by an Executive Order that directed agencies to make relevant
information available to consumers in a readily useable manner to ensure that Federal healthcare programs
promote quality and efficient delivery of health care through the use of health information technology,
transparency regarding health care quality and price, and better incentives for program beneficiaries, enrollees,
and providers. Exec. Order No. 13,410, 71 Fed. Reg. 51,089 (Aug. 28, 2006), available at http://www.gpo.gov/
fdsys/pkg/FR-2006-08-28/pdf/06-7220.pdf; see also High Prices, Low Transparency; The Bitter Pill of Health
Care Costs: Hearing Before the S. Comm. on Finance, 113th Cong. 8 (2013) (statement of Paul B. Ginsburg,
Ph.D., Center for Studying Health System Change and National Institute for Health Care Reform), available at
http://www.finance.senate.gov/imo/media/doc/Ginsburg%20June%2018%20Senate%20Finance%20Hearing%20
Transparency.pdf.

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39 Eleven states, including Minnesota, have established databases that collect health insurance claims information
from all health care payers (including private health insurers, Medicaid, children’s health insurance and state
employee health benefit programs, prescription drug plans, dental insurers and self-insured employer plans) and
put the data into a statewide information repository, referred to as “all-payer claims databases” (“APCDs”). See,
e.g., Minnesota’s All Payer Claims Database (APCD), M INN . D EP’T. OF H EALTH, http://www.health.state.mn.us/
healthreform/allpayer/. These databases collect eligibility and service-level claims data to make cost, use, and
quality comparisons among health plans and health providers. The purpose of these APCDs is to inform cost
containment and quality improvement efforts. APCDs are also available in Colorado, Kansas, Maine, Maryland,
Massachusetts, New Hampshire, Oregon, Tennessee, Vermont, and Virginia. Three other states (Connecticut,
Rhode Island, and Arkansas) are in the early stages of data collection; three other states (Hawaii, California and
New York) are initiating development of APCDs, and 21 more states are considering APCD legislation. However,
is still too early to determine whether APCDs can help states control costs. See National Conference of State
Legislatures, All-Payer Claims Databases – Health Cost Containment (updated Oct. 2013), http://www.ncsl.org/
research/health/collecting-health-data-all-payer-claims-database.aspx; M INN. Div. H EALTH P OL’Y, M INN. D EP’ T.
OF H EALTH, M INNESOTA A LL P AYER C LAIMS D ATABASE W ORKGROUP REPORT TO THE M INNESOTA LEGISLATURE
- 2014 (2015), available at http://www.health.state.mn.us/healthreform/allpayer/
APCDwkgrpFinalRpt2015Jan.pdf; see also Minnesota’s All Payer Claims Database (APCD) Frequently Asked
Questions, M INN. D EP’ T. OF H EALTH, http://www.health.state.mn.us/healthreform/allpayer/faq.html.
40 MDHS REPORT, supra note 9, at 4.
41 See, e.g., ERISA C OMMENT, supra note 12; NY LETTER , supra note 12; NJ LETTER , supra note 12; B RILL
D ISSENT LETTER , supra note 12.
42 The risk of anticompetitive harm from facilitating practices of information sharing is greatest in concentrated
product markets. See Susan DeSanti & Ernest Nagata, Competitor Communications: Facilitating Practices or
Invitations to Collude? An Application of Theories to Proposed Horizontal Agreements Submitted for Antirust
Review, 63 ANTITRUST L.J. 93, 97 (1994); see also Reinhardt, supra note 32, at 1642.
43 See Kai-Uwe Kuhn, Fighting Collusion: Regulation of Communication Between Firms, 16 E CON. P OL’Y 169, 170
(2001) (“The notion that communication is central to collusion is without doubt part of the general folklore of
competition policy at least going back to Adam Smith.”); Svend Albaek, Peter Mollgaard & Per Overgaard,
Government Assisted Oligopoly Coordination? A Concrete Case, 45 J. I NDUS. ECON. 429, 430 (1997) (“At least
since Stigler’s seminal article, [industrial organization] literature has stressed the importance for (tacitly)
colluding oligopolists of observing firm-specific transactions prices of their rivals and rapidly detecting changes in
these. Otherwise, collusion is prone to break down.”).
44 See COLLABORATION G UIDELINES, supra note 6; H EALTH C ARE STATEMENT 6, supra note 6.
45 The MDHS Report states that the hospital markets in Minnesota are highly concentrated statewide, and individual
metropolitan areas have even higher market concentrations. In the Twin Cities, the three largest providers—Allina
Health, Fairview Health Services and Mayo Clinic—control nearly 30% of all the hospital beds in the state as well
as potentially 43% of the physician services. The Report notes that 51 counties are served by only one hospital.
See MDHS REPORT, supra note 9, at 21. Further, the MDHS Report warns that high levels of market
concentration found in the hospital and provider markets in Minnesota would facilitate anticompetitive outcomes
from increased transparency. Id.
46 See, e.g., David Cutler & Leemore Dafny, Designing Transparency Systems for Medical Care Prices, 364 N EW
E NG. J. M ED. 894, 894 (2011) (“There is only limited research on the effects of transparency initiatives for medical
prices. Two recent studies found no effect of hospital price transparency in New Hampshire or California, but
these analyses were (of necessity) limited to 1 or 2 years of post-initiative data.”).
47 See, e.g., Albaek et al., supra note 43 (publishing of concrete prices resulted in 15-20% price increases); Stephen
W. Fuller et al., Effect of Disclosure on Price: Railroad Grain Contracting in the Plains, 15 W.J. AGRIC . E CON.
265 (1990); see also Maura P. Doyle & Christopher M. Snyder, Information Sharing and Competition in the
Motor Vehicle Industry, 107 J. P OL. E CON. 1326 (1999) (finding evidence that automakers respond strategically to
production announcements by rivals).

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48 See Michael G. Vita, Regulatory Restrictions on Selective Contracting: An Empirical Analysis of `Any-Willing-
Provider’ Regulations, 20 J. HEALTH E CON. 955 (2001); Jonathan Click & Joshua D. Wright, The Effect of Any
Willing Provider and Freedom of Choice Laws on Prescription Drug Expenditures, 17 AM . L. E CON. REV. 1
(2014).
49 PBMs negotiate with drug manufacturers for discounted fees and rebates based on restricted formularies. In prior
advocacies on proposed state regulations that would have imposed disclosure requirements on compensation and
fees paid for PBM services, FTC staff previously has expressed concerns that such public disclosures of
information could reduce competition and increase prices. See ERISA COMMENT, supra note 12; NY LETTER ,
supra note 12; NJ LETTER , supra note 12; BRILL D ISSENT L ETTER , supra note 12; see also FED. T RADE COMM ’N,
P HARMACY B ENEFIT M ANAGERS: O WNERSHIP OF M AIL-O RDER P HARMACIES (2005), available at
https://www.ftc.gov/sites/default/files/documents/reports/pharmacy-benefit-managers-ownership-mail-order-
pharmacies-federal-trade-commission-report/050906pharmbenefitrpt_0.pdf; Richard G. Frank, Prescription Drug
Prices: Why Do Some Pay More Than Others Do?, 20 HEALTH A FF. 115, 125 (2001); Ernst R. Berndt,
Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price, 16 J. E CON. P ERSP. 45 (2002),
available at http://www.jstor.org/stable/3216914.
50 Similarly, GPOs and health insurance companies negotiate discounts based on selective network design to
encourage use of certain lower priced vendors. These confidential negotiations are a primary means by which
these market participants control costs. The prices charged by the same supplier to different customers can vary
substantially depending on numerous market factors and relative negotiating leverage. For example, news articles
report substantial discounts were negotiated by Express Scripts, one of the largest prescription benefit managers in
the country, for one of two newly approved hepatitis C drugs that have a list price in the U.S. of $84,000 per
patient per year, in exchange for exclusive formulary listing. See, e.g. Tracy Staton, Sorry, Gilead. AbbVie Cuts
Exclusive Hep C Deal with Express Scripts, F IERCE P HARMA, Dec. 22, 2014, http://www.fiercepharma.com/story/
sorry-gilead-abbvie-cuts-exclusive-hep-c-deal-express-scripts/2014-12-22; Caroline Humer, Express Scripts to
Cover AbbVie HepatitisC Drug, Drops Gilead Treatment, REUTERS, Dec. 22 2014, http://www.reuters.com/
article/2014/12/22/express-scripts-abbvie-hepatitisc-idUSL1N0U50M120141222.
51 See Fed. Trade Comm’n Workshop, Examining Health Care Competition, supra note 35, Tr. at 82 (Statement of
Aron Boros, Exec. Director, Center for Health Information and Analysis). Further discussion among workshop
panelists revealed that price transparency can support certain benefit designs and contracting practices that may
result in high-priced hospitals reducing their rates. In such situations, it is possible that these rate reductions may
offset the upward pricing pressure from the low-priced hospitals. At the workshop, Dr. Paul Ginsburg stated:
[S]trictly from an economic theory point of view, I’d be most concerned with the higher priced
providers basically being discouraged from experimenting with cutting their prices because they
wouldn’t gain as much market share if their competitors knew about it. But the anecdotes
[discussed at the workshop] seem to be more about the low priced hospitals’ ignorance about how
their prices compared with others. These are the risks and hence the reason for using the
transparency cautiously.
Id. at 84 (Statement of Paul Ginsburg, Norman Topping Chair in Medicine and Public Policy, University of
Southern California).
52 See, e.g., MDHS Report, supra note 9, at 102, (Letter from UCare to Patrick Hulman) (“The disclosure of current
payment rate information attributable to specific health plans, providers and vendors would inhibit the ability of
health plans to control costs and provide cost-savings benefits to Minnesota taxpayers through negotiating
favorable rates with providers and vendors.”).
53 MDHS Report, supra note 9, at 83 (Appendix).
54 See id. (Minn. Council of Health Plans’ Response to Request for Information: Contracting with Minnesota Health
Care Programs and the Minnesota Government Data Practices Act). This public comment by the Minnesota
Council of Health Plans argued that putting additional disclosure barriers on already reluctant specialty dental
providers could further discourage these providers from seeing Minnesota Medicare and Medicaid patients,
resulting in shortage of already tenuous dental services. MN Community Measurement collects and reports cost

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data for medical groups based on 1.5 million patients, representing the $8 billion in total care costs paid by both
patients and their health insurance plans in 2014. The four Minnesota health plans that provided cost data to MN
Community Measurement are Blue Cross and Blue Shield of Minnesota, HealthPartners, Medica and
PreferredOne. They perform quality and price metric calculations for the State and would be subject to the same
disclosure requirements, potentially chilling their ability to perform their obligations. See MN COMMUNITY
M EASUREMENT, http://mncm.org and, for it data collection practices, see Data Collection and PQRS, MN
COMMUNITY M EASUREMENT, http://mncm.org/services-solutions/data-collection-and-pqrs/.