Federal Trade Commission antitrust activities in the health care services field

• Published date: 01 June 1984
• DOI: 10.1177/0003603X8402900203
• Author: Arthur N. Lerner
• Date: 01 June 1984
• Subject Matter: Article

The Antitrust Bulletin/Summer 1984

Federal Trade Commission

antitrust activities

in the health care services field

BYARTHUR N. LERNER*

205

Antitrust

litigation in

the

health care services field has exploded

in

the

last decade. This article surveys an

important

portion

of

that

growth,

government

antitrust

enforcement,

and

particularly

that

by

the

Federal

Trade

Commission.'

I.

Overview

of

the Commission's health care antitrust

program

In

the

first significant

antitrust

decisions in

the

health

care

services field,

both

the

Court

of

Appeals

for

the District

of

Assistant Director for Health Care, Bureau of Competition,

Federal Trade Commission.

AUTHOR'S NOTE: The views expressed in this article do not necessarily

reflect those

of

the Commission, any individual commissioner, or the

Bureau

of

Competition. The author acknowledges the assistance in

preparing this article provided by Oscar M.

Voss,

an attorney in the

Bureau

of

Competition.

1This article does not discuss the non-antitrust enforcement activi-

ties in the health care field of the Commission's Bureau of Consumer

Protection and regional offices. Furthermore, this article does not

discuss the merits of the legal analysis the Commission has applied in its

health care antitrust activities, or the appropriateness of applying

antitrust principles in health care markets. Rather, it provides a sum-

mary of the Commission's actions in the area, for those interested in

exploring the issues further.

©1984by Federal Legal Publications. Inc.

206 : The antitrust bulletin

Columbia

Circuit

and

the U.S. Supreme

Court

upheld a

jury's

conviction

of

the

American Medical Association (AMA)

and

a

local medical society for engaging in a criminal conspiracy to

obstruct

the

operation

of

aprepaid health care plan,

the

Group

Health

Association in Washington, D.C.2

The

court

of

appeals

found

that

the

AMA

was seeking in

part

to protect

"the

economic

status

of

the medical profession,")

but

the

court

emphasized

instead

another

theme, one

that

runs

through

antitrust theory: a

private

group

may

not

suppress competition simply because it

believes

that

doing so is in the public interest.

The

medical

societies claimed

that

boycotting the

group

health

plan

and

its

doctors

was justified because the plan was, in their view, illegal,

and

it was unethical for doctors to work for such aplan. In

rejecting this

argument,

the court explained

that

medical societies

are not law enforcement

agencies;

they are charged with no duties of

investigating or prosecuting, to say nothing of convicting and

punishing

....

Except for their size, their prestige and their

otherwise commendable activities, [defendants'] conduct in the pres-

ent case differs not at all from that of any other extra-governmental

agency which assumes power to challenge alleged wrongdoing by

taking the law into its own hands.'

Despite the success

of

this enforcement action against the

AMA,

antitrust

enforcement in

the

health services field was

limited until

the

mid-1970s because it was widely believed

that

enforcement

efforts

would be blocked by a variety

of

defenses,

such as the state

action,'

interstate commerce,"

and

McCar-

2American Medical Ass'n v. United States, 130 F.2d 233 (D.C.

Cir.

1942),

aff'd,

317 U.S. 519

(1943).

3130 F.2d at 239 n.23.

4[d. at 249.

5See Parker v. Brown, 317 U.S.

341

(1943).

6See, e.g., 15 U.S.C. §§ 1-3, 44,

45(a)(1)

(1976)

(jurisdiction

under Sherman and Federal Trade CommissionActs limitedto activities

with some nexus to interstate or international commerce, or commerce

in the District of Columbia).