Intermountain Health Care, Inc.("IHC"), and its vertically integrated affiliates, is the 900 pound gorilla of Utah Healthcare. It operates 19 acute care hospitals and 6 surgical centers in Utah (9 Hospitals and 5 surgical centers on the Wasatch front) and 4 managed care plans. The managed care plans through IHC Health Plans, Inc., now called "SelectCare", have enrolled approximately 60% of the managed care market on the Wasatch front. IHC controls approximately 51 to 55% of the market for hospital and surgical facilities on the front.
In Anderson et al. v. Intermountain Health,Inc. et al, __F. 3d. ____( 10th Cir. 2006), a group of optometrists who have been excluded from IHC managed care plan panels by IHC brought and antitrust suit against IHC and its affiliates claiming that IHC and a group of ophthalmologists had engaged in a horizontal boycott of the optometrists, that IHC illegal tied its managed care plans to surgical and nonsurgical eye care services offered by the ophthalmologists and that IHC had developed a monopoly in hospital and surgical services on the Wasatch front in Utah. The Case was dismissed on summary judgment by the trial court and the plaintiffs appealed to the federal 10th Circuit Court of Appeals.
The 10th Circuit Court of Appeals affirmed the action of the trial court in dismissing the action on summary judgment. The Section 1 Sherman Act Claim for conspiracy in restraint of trade failed because the plaintiffs were only able to raise inconclusive circumstantial evidence in opposition to the motion. They showed that ophthalmologists opposed the inclusion of optometrists on the IHC panel and that IHC chose to continue the exclusion despite the fact that the cost of non surgical eye care by optometrists trended 20% below that of ophthalmologists. The court said that those factors alone were insufficient to establish the exclusion of the possibility of independent action by the hospital. Absent were so called "plus factors" such as a showing of a quid pro quo agreement between IHC and the ophthalmologists or coercion on the part of the ophthalmologists. To the contrary, IHC showed that it needed to restrict the number of providers in order to make the trade off of low prices and larger volumes work with providers and the fact that it preferred to deal with physicians on its medical staff.
The Court dispatched the "tying" claim on the basis that the plaintiffs were unable to establish the existence of two separate products being tied. IHC did not itself sell non-surgical eye care treatment and had no economic interest in the ophthalmologists who did.
The optometrists lacked "standing" to assert the Section 2, Sherman Act claim for monopolization of hospital and surgical services in the Wasatch front because they did not suffer anti-trust injury, which is designed to protect competition not competitors. The court noted that even if IHC were successful in monopolizing all of the hospital and surgical services related to eye care in the Wasatch front, that will still represent only a small fraction of such services. The court noted that the optometrists had "no natural economic self interest in preserving conpetition in the market for surgical services along the Wasatch range. " In other words, if there is a monopoly the optometrists are not the right plaintiffs to complaint about it.
Some members of the Utah legislature and in the health care industry in Utah have registered concerns about the growing dominance of IHC in Utah healthcare and the possibility of IHC having achieved monopoly status. There is likely to me more to come in this story, but the optometrists will not be at the table.
"The court noted that even if IHC were successful in monopolizing all of the hospital and surgical services related to eye care in the Wasatch front, that will still represent only a small fraction of such services." this was so shocking for me I have already read some article the same case wondering why still happen?
jayn
Posted by: cataract eye surgery | June 08, 2010 at 11:31 PM