Law & Medicine

Antitrust issues in health care (Part I)


As a general proposition, restraint of trade and monopolistic charges are difficult to prove. Monopoly through "the exercise of skill, foresight, and industry" does not constitute monopolizing conduct.

5. Joint ventures. The two main ways physicians form network joint ventures are: 1) join together in an entity with shared financial risks and clinical integration, and 2) join a looser network without integration to simply facilitate the flow of information for contracting purposes between physicians and other payers, the so-called messenger method.

Many health delivery systems involve joint venture agreements among practitioners or groups of health professionals and health care institutions, e.g., physician hospital organizations (PHOs), independent practice associations (IPAs), and preferred physician organization (PPOs). Physicians and physician practice groups may become targets if their attempted efforts at joint ventures are deemed to be a pretext for price fixing or otherwise anticompetitive.

The DOJ and FTC have promulgated guidelines regarding joint venture structures and will perform a review of the proposal upon request.3

However, under Obamacare, which promotes the efficient integration of health services through competition such as accountable care organizations, these guidelines are likely to be revised in the near future.

6. Exclusive contracts. Many hospitals have exclusive contracts with health professionals such as radiologists, anesthesiologists, and pathologists. Patients using the facility may be forced to use the services of these providers ("tying arrangement"). If the hospital does not possess requisite market power, or force the acceptance of the service, such agreements may pass antitrust scrutiny.

7. Peer review. The Health Care Quality Improvement Act (42 U.S.C. §§ 1101 et seq.) immunizes physicians and others performing peer review activities from federal antitrust claims so long as peer review was carried out: 1) in reasonable belief that the action was in furtherance of quality health care; 2) after reasonable effort to obtain the facts; 3) after an adequate notice and hearing procedure; 4) in reasonable belief that the action was warranted; and 5) any adverse outcome was reported to the National Practitioners’ Data Bank.

A doctor who is judged wanting in peer review occasionally asserts a discriminatory or anticompetitive intent, and may file a retaliatory lawsuit. One caveat: Peer review deliberations are always held in strict confidence. Disparaging a doctor under review in an unrelated forum constitutes a violation of the peer review process, which risks nullification of discovery protection and antitrust immunity.

Antitrust problems are highly fact dependent and analytically complex, and therefore require counsel with special expertise and experience. Issues are surprisingly prevalent and may be counterintuitive, affecting not only parties in joint ventures and mergers, but also the solo office or hospital practitioner. Matters of medical staffing, joint purchasing, information exchange, managed care negotiation, peer review and price agreements are some examples.

Penalties are severe, and may cover more than simple cease and desist orders. Some behavior constitutes criminality punishable by prison terms, though this is rare in the health care arena.

More often, the guilty parties face heavy monetary fines from both governmental officials as well as private litigants who can join in the lawsuit and stand to benefit from awards of treble damages and attorneys’ fees.


1. Goldfarb v. Virginia State Bar 421 U.S. 773, 1975.

2. Code of Medical Ethics, AMA, 9.025, 2012-2013 edition.

3. Statements of Antitrust Enforcement Policy in Health Care. Department of Justice and Federal Trade Commission (1996).

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

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