Can a professional organization advise its members of pitfalls or drawbacks of health care plans? In International Healthcare Management v. Hawaii Coalition for Health (332 F.3d 600 [9th Cir. 2003]), the Hawaii Medical Association (HMA), the state’s medical organization, was sued for allegedly organizing a boycott of two managed care organizations when it advised its doctor members of certain problems with the proposed provider contracts. HMA argued that it neither forged an agreement to act in concert nor encouraged its members to participate in any boycott. It won a summary judgment in the U.S. District Court dismissing the suit, which the U.S. Court of Appeals for the Ninth Circuit affirmed.
Finally, antitrust prosecutions may be expected to increase under Obamacare, which advocates the efficient integration and consolidation of quality health services to achieve health cost savings. Any action taken, however, must still pass antitrust scrutiny.
One scenario is the trend toward hospital acquisitions of physician practices. The case of Idaho’s St. Luke Health Systems, a nonprofit, six-hospital system based in Boise and the largest in the state, is a prime example.
In a recent decision, a federal judge sided with the FTC in blocking St. Luke’s Health System from acquiring the 40-doctor Saltzer Medical Group – an acquisition made in the name of better "integrated health care." The FTC had alleged that the merger would give St. Luke a nearly 60% share of the primary-care market, resulting in diminished competition among primary care physicians. Idaho’s attorney general, as well as two other competitor health systems in Boise, also joined in the suit.
The federal court ruled against St. Luke’s, claiming that there was a legal and less anticompetitive way to achieve its goal of improving health care delivery in the area. The acquisition had in fact taken place more than a year ago, and St. Luke’s is now left with the task of dismantling the acquisition.
Antitrust law is complex and difficult, some issues and results may appear surprising and counterintuitive, and penalties can be severe (such as treble damages). All business transactions including those that touch on health care should therefore proactively examine whether they illegally affect free market competition.
Dr. Tan is professor emeritus of medicine and former adjunct professor of law at the University of Hawaii. This article is meant to be educational and does not constitute medical, ethical, or legal advice. Some of the articles in this series are adapted from the author’s 2006 book, "Medical Malpractice: Understanding the Law, Managing the Risk," and his 2012 Halsbury treatise, "Medical Negligence and Professional Misconduct." For additional information, readers may contact the author at siang@hawaii.edu.