Violations of the Sherman Act generally require a demonstration of market power in the “relevant market.” The relevant market has two components—the relevant product market and the relevant geographic market.
In determining the relevant product market, the analysis assesses those products that are reasonably interchangeable. For example, telemedicine services may arguably be a reasonable substitute for primary care services, but not likely for emergency room services. As more inpatient hospital services become available on an outpatient basis, and as the line demarcating what used to be exclusively “inpatient” services continues to blur, determining the relevant product market in health care can be challenging.
Similarly, a relevant geographic market requires a determination of the area in which there is “effective competition” for the relevant product. Traditionally in health care, geographic markets are local (although not always corresponding with what a provider might consider its “primary service area”). However, for certain high-end specialty services, for which patients may be willing to travel long distances, the geographic market could be quite broad.
Thus, as the modality of health care changes, determining the relevant product and geographic market in health care becomes more challenging and requires careful assessment and analysis.