The Antitrust Challenge To The Professions

The professions have always maintained a delicate balance between altruism and economic self-interest (Jonsen, 1990). As the medical profession became more scientifically effective and better organized, it enjoyed regulations (licensure, specialty certification, and accreditation) that guaranteed a virtual monopoly on healthcare delivery. Healthcare became synonymous with medical care. Although the Sherman Antitrust Act of 1890 banned monopolies, the learned professions were considered exempt from the act, which applied only to businesses. Late in the twentieth century, however, the business aspects of medicine began receiving increased attention, and the learned professions exemption ended in 1975 with the U.S. Supreme Court's Goldfarb v. Virginia State Bar decision, in which Virginia lawyers were found liable to charges of price-fixing the fees charged for title searches. The Goldfarb decision heralded a flurry of antitrust activity in the professional arena, most notably the 1975 suit by the Federal Trade Commission (FTC) against the American Medical Association, holding that the AMA was in restraint of trade because its code of ethics prohibited advertising. The AMA Principles of Medical Ethics then in effect (1957 version) said simply, "[A physician] shall not solicit patients," meaning that a physician should not attempt to obtain patients by deception. The 1980 revision eliminated all reference to advertising. Nonetheless, in the 1982 case Federal Trade Commission v. American Medical Association, the U.S. Supreme Court decided in favor of the FTC, barring the AMA from making any reference to advertising and the solicitation of patients, and further prohibiting the AMA from "formulating, adopting and disseminating" any ethical guidelines without first obtaining "permission from and approval of the guidelines by the Federal Trade Commission."

The FTC suit hinged on the questions of cost, advertising, and the mercantile aspects of medical practice. The position of the FTC was that costs were high because doctors had a monopoly on healthcare delivery and could thus maintain artificially high costs for their own profit. If doctors were not prohibited from advertising, it was argued, prices would come down because patients could shop for the best prices. In other words, medicine could better be controlled if it were regulated as a business rather than as a profession (Pertschuk).

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