Economics goverment - Essay Example

Indeed, the defendants in the case, Carilion Health System defeated the U.S. Department of Justice by showing that hospital markets have unique characteristics that deviate from the norms of commerce. As such, in 1989, the U.S. Department of Justice failed to prevent the merger between Carilion Health System and another hospital in Roanoke (Eisenstadt, 1989). Hence, the two hospitals merged and continued to operate separately in Roanoke after the 1989 merger. However, in 2006, Carilion consolidated the two hospital boards and transferred most the workers and services to Roanoke Memorial Hospital (RMH).

It also sought to buy the services of private physician groups. The CEO of Carilion Health System believed that medical staff could improve the cost and quality of care in Roanoke while operating in a centralized system. Because of the merger, there was no hospital competition in Roanoke. Subject to this, the cost of health care is on an all-time high and the health-insurance rates are very high in Roanoke, Virginia (Carreyrou, 2008). The Hospital Competition and Costs: The Carilion Case (1989) had fundamental legal issues as presented by the U.

S Department of Justice (DOJ) and Carilion. The jury sought to litigate the issue related to the effect on competition and the presence of efficiencies. Indeed, after the defendants and the DOJ have made their case, the court sought the jury’s advisory on three legal facts. The court sought an advisory on the correctness of the DOJ’s alleged geographic market, the DOJ’s assertion that the relevant product market consisted of only inpatient hospital care, and the consolidation’s likely effect on competition (Eisenstadt, 1989).

To this effect, the DOJ had the legal burden of proofing that the proposed merger would lead to adverse competitive effects and would not derive