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Recent Developments in Antitrust Law and Their Implications for the Clinton Health Care Plan

Published online by Cambridge University Press:  01 January 2021

Michael S. Jacobs
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Extract

Although the details of the Clinton health care plan have yet to emerge from the continuing policy debate over the shape and size of the administration’s reform measures, one thing has become increasingly clear. Several recent developments in antitrust law will have important implications for what the plan will permit and how it will work.

By all accounts, the broad outline of the administration’s plan revolves around the development of large and powerful consumer groups who, with the help of sophisticated, government-established intermediaries, will presumably purchase health care wisely and well. This alliance of massed consumer purchasing and government information-gathering will, it is hoped, produce a health care market more in competitive balance than the current version, which is widely regarded as dominated by powerful providers who dictate terms to small, uninformed buying groups.

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Article
Information
Journal of Law, Medicine & Ethics , Volume 21 , Issue 2 , Summer 1993 , pp. 163 - 172
Copyright
Copyright © American Society of Law, Medicine and Ethics 1993

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References

See, for example, Stout, Hilary and Wartzman, Rick, “WithHealth Care PackageNearing Completion, Clinton Must Now Make Some Tough Decisions,” The Wall Street Journal, May 18,1993, at A18.Google Scholar
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See, for example, Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975) (lawyers); FTC v. Superior Court Trial Lawyers Association, 493 U.S. 411 (1990) (lawyers); National Society of Professional Engineers v. United States, 435 U.S. 679 (1978) (engineers).Google Scholar
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Since the early days of antitrust law, courts have taken two separate approaches to allegations of anticompetitive behavior under Section One of the Sherman Act—the rule of reason and the per se rule. Because most business conduct could be deemed to be in restraint of trade—contracts restrain the signatories, partnerships restrain the partners—the Sherman Act has been interpreted to make illegal only those restraints that are unreasonable. See Chicago Board of Trade v. United States, 246 U.S. 231 (1918); Piraino, Thomas A. Jr., “Reconciling the Per Se and Rule of Reason Approaches to Antitrust Analysis,” 64 S. CAL. L. Rev. 685, 689 (1991). Under the “rule of reason” standard, courts engage in a factual inquiry into the “competitive circumstances and justifications of business conduct” to determine the reasonableness of any alleged restraint. Id. The per se rule of illegality developed in response to the burdensome, often unnecessary, and sometimes fruitless factual inquiry required by the “rule of reason” standard. Under the per se rule, “[p]ractices clearly having a ‘pernicious effect on competition’ and lacking ‘any redeeming virtue’ could be conclusively presumed to be illegal without inquiry into competitive purpose or market effect.” Id. at 691. This categorical and absolutist approach has the weakness of occasional overbreadth, but it reduces the time and expense of litigation and provides clear guidelines for courts and businesses. Id. at 691–92.Google Scholar
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In particular, the independent service organizations alleged that Kodak had violated Section One of the Sherman Act by unlawfully tying the sale of service for Kodak machines to the sale of parts and that Kodak had violated Section Two of the Act by unlawfully monopolizing and attempting to monopolize the service market for Kodak copying and micrographic machinery. 112 S.Ct. at 2078.Google Scholar
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