Medical-equipment manager Universal Hospital Services is suing manufacturer Hill-Rom Holdings for allegedly using its dominance in hospital bed manufacturing to illegally squash competition for equipment rentals.
Minneapolis-based Universal Hospital Services (not to be confused with hospital operator Universal Health Services) filed a lawsuit in U.S. District Court in San Antonio Texas on Tuesday alleging that Hill-Rom is breaking antitrust laws.
The lawsuit alleges that Indiana-based Hill-Rom uses its market power as the dominant manufacturer of hospital beds to increase its market share for medical equipment rentals. It does so by negotiating sole-source agreements with national group-purchasing organizations and hospital networks that include steep discounts and rebates on standard hospital beds in exchange for commitments to use Hill-Rom for rentals of patient-handling equipment and moveable medical equipment, according to the lawsuit.
Attempts to reach Hill-Rom were not immediately successful Friday morning.
“Hill-Rom knows that, no matter how efficiently or aggressively its competitors in the [patient-handling equipment] and [movable medical equipment] rental markets price their products, competitors simply cannot compete with these steep bundled discounts because they do not sell standard hospital beds,” according to the complaint.
The lawsuit claims that if Hill-Rom is allowed to continue its practices, competitors will be squeezed out of the market, and Hill-Rom will be able to raise prices, meaning increased costs and fewer choices for providers.
This is not the first time Hill-Rom has been accused of such conduct. In Hill-Rom and its predecessor agreed to pay $316 million in 2006 to South Carolina-based Spartanburg Regional Project Japan System to resolve a lawsuit accusing Hill-Rom and its then-parent company, Hillenbrand Industries, of breaking antitrust laws. Hill-Rom denied any wrongdoing in that case.
As part of that settlement Hill-Rom also agree to a voluntary three-year injunction preventing the company from bundling its standard hospital beds with rental of certain patient-handling equipment, according to the current UHS lawsuit. That injunction expired in 2009.
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