Chief FTC Economist Appointed

September 11, 2013

On September 9, the Federal Trade Commission announced that Martin Gaynor will serve as Director of the FTC’s Bureau of Economics starting October 1. He joins the agency from Carnegie Mellon University, where he was a professor of economics and public policy. Gaynor has an extensive publication and teaching background and has received numerous awards for research in health care economics. He earned doctoral and master’s degrees in economics from Northwestern University. Gaynor replaces Howard Shelanski, who left the FTC in July to become the Administrator of the Office of Information and Regulatory Affairs in the Office of Management and Budget.

In his writings, Gaynor has emphasized that competition and antitrust enforcement are critical components of health care policy in the United States. He has also focused on the importance of quality in assessing the performance of health care markets. Gaynor is interested in the rapidly growing empirical literature on competition and quality in health care, which he believes can help inform antitrust enforcers and policy makers. He interprets the empirical evidence as showing, for example, that health care competition benefits consumers, that mergers leading to large increases in concentration can lead to very large price increases, and — perhaps surprisingly — that more competition leads to better health care quality for Medicare patients but not for privately-insured patients. Although much of Gaynor’s work relates to health care providers (e.g., hospitals and physicians), he has also published on a variety of other health care and industrial organization topics.

Gaynor is no stranger to the FTC, having served as a consultant to the agency and participated in the 2003 FTC/DOJ hearings on health care competition law and policy. Gaynor also signed an amicus brief along with several other economists in the FTC’s Evanston Northwestern Healthcare (ENH) case urging the Commission to “split up” ENH to remedy its illegal acquisition of a rival hospital.

Gaynor’s appointment is a clear signal that health care enforcement, particularly in the hospital sector, remains a priority for the FTC and Chairwoman Edith Ramirez. Gaynor’s appointment may also result in some subtle shifts in both health care and non-health care investigations in the Bureau of Economics. His empirical focus suggests that he may place less weight on some of the theoretical economic models supported by some of his predecessors at the agency and is likely to be more open to evidence-based arguments, even if they conflict with prevailing views. On the other hand, Gaynor’s concern with increases in concentration in health care markets suggests that structural considerations may be given greater emphasis than in recent past. Finally, his writings show a consistent regard for consideration of non-price effects, such as quality, that is likely to carry over into his work at the FTC.

This article was originally published by Bingham McCutchen LLP.