DOJ's closing argument at Aetna trial

December 31, 2016

  • DOJ tried to drive home that while the industry at hand in this case is complex, the case has a simple antitrust answer. The presumption of unlawfulness was too much for Aetna to overcome. There may be alternatives, divestitures, and regulation, but the central question of the case will always be: is MA competition something worth preserving? 

 

  • Judge Bates asked very specific questions about benchmarks he should be looking to about entry success, timeframe with regard to competitive harm, and touched on (though not by name) the idea of type I and type II errors in economic analysis. At every turn, DOJ was effective in explaining how the merger guidelines do not need to be overthought; MA/OM are not reasonable substitutes; regulation is not a replacement for competition; Aetna itself sees the market the way DOJ presents it.

 

  • DOJ and Bates discussed relevant case law to a great degree, citing HR Block (comparable products =/= same market), Staples (narrow product market accepted), and Whole Foods (similar offerings, different basket of goods). 

 

  • The last substantive points were the most likely effect of divestitures and Aetna's withdrawal from public exchanges. DOJ showed that even if Molina performed at average levels, retained an average number of clients, and delivered half of the efficiencies promised, around 70% of counties would still have an antitrust problem. They also went over the Aetna emails about pulling out of ACA exchanges, and their sloppy handling of sensitive conversations about the "17 counties."

 

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