Thirty Years of Solicitude: Antitrust Law and Physician Cartels

Abstract:     
Over the last thirty years the Federal Trade Commission and the Department of Justice have challenged dozens of physician cartels, networks, and other arrangements that they alleged constituted price fixing or other restraints of trade under the antitrust laws. In addition, the antitrust agencies have issued numerous advisory opinions, published detailed statements of enforcement policy, and made dozens of public statements on the issue of physician collaboration. The puzzle explored in this essay is why the government's deployment of unparalleled enforcement resources has not curtailed physician attempts to engage in collective bargaining and other attempts to restrain price competition. It first analyzes the hypothesis that overly cautious government enforcement policies created a mismatch between penalties and rewards that invited abuse. While finding merit in this explanation, the essay offers a more nuanced account. It suggests that a convergence of other factors including doctrinal shortcomings, political pressures, and institutional factors may have deterred the Agencies from seeking stronger remedies and emboldened parties who questioned the role of competition in health markets generally. A related claim of this essay is that the Agencies may have inadvertently precipitated some of this conduct by the regulatory efforts they have undertaken.

Number of Pages in PDF File: 38

Keywords: antitrust, physicians, FTC, U.S. Department of Justice, Health Care Competition, Managed Care

Accepted Paper Series