July 1995 Bulletin

Antitrust clouds work force solutions

Sherman law bars many ways to reduce specialist training

If the general consensus that there are too many physicians, particularly specialists, being trained is true, who will manage the health care work force?

Does the answer rest with the collective action of the deans of orthopaedic departments or professional associations? Better not, says antitrust expert Arthur N. Lerner in the following story.

Is the answer a national commission? Jerald McClendon says that notion is dead in predict.doc.

Will more opportunities in the primary care area lure more medical school graduates? The invisible hand of supply and demand works surely, but sometimes very slowly.

Of all the issues surrounding the changing health care delivery environment in the U.S., one of the most perplexing is how can the medical profession deal with the manpower issue without running afoul of U.S. antitrust laws?

For more than a decade there has been increasing concern that there are too many graduate medical students being trained as specialists and too few as generalists.

The Council on Graduate Medical Education, Association of American Medical Colleges, and other organizations have supported the idea that the training should be shifted to produce more primary care physicians.

The health care reform debate in Congress included a number of bills to create a national commission to regulate the number of graduate medical trainees and increase the proportion training in primary care.

Meanwhile, during the last three years, there has been an increase in the number of graduating medical students expressing a preference for primary care practice, although they still represent less than one-fourth of the graduates. Some believe that the balance may self-correct as students perceive that the growth of managed care organizations will provide more career opportunities for primary care physicians and less demand for specialists. But others say the adjustment may take too long.

So, how can the manpower issue be addressed? Establishing a national commission to regulate the number of trainees may not be easy to achieve politically, but from a legal viewpoint government could regulate the medical education with less problems than academic or professional organizations. The stumbling block faced by the profession is the nation's antitrust laws that prevent activities which stifle competition.

Government can do it

Arthur N. Lerner, a partner in the Washington, D.C. law firm, Michaels, Wishner & Bonner, P.C., and a former antitrust expert at the Federal Trade Commission, points out that the federal government itself cannot violate antitrust laws and could adjust the balance through reimbursement and funding mechanisms.

An individual state cannot violate antitrust laws. State agencies could carry out state legislation to regulate the training. Private parties carrying out state policy to regulate training, under the supervision of the state, also are immune from antitrust laws. Congress also could expressly repeal the antitrust laws for certain activities.

But what about the academic and medical professional organizations?

In a presentation at a conference sponsored by the Health Resources and Services Administration, Department of Health and Human Services, in March, Lerner said that the same antitrust laws that prevent price-fixing by industry and corporations also apply to the professional and non-profit sector.

"The premise is that competition will yield the best mix of price, quality, and service for the public," he said in a paper, "Antitrust Issues and Physician Specialty Supply." "In those situations where competition is not likely to provide this optimal mix, state or federal legislation can alter the impact of the antitrust laws, for example, by limiting who can compete in a particular field or how they can compete. Thus, licensing laws already limit who can practice medicine or operate hospitals."

However, he said that "it is normally not up to the members of an industry or profession to themselves elect to suppress forms of competition in the belief the public will be better served.

"The reasonableness of a restraint is assessed on the basis of its impact on competition, not on whether it will improve social welfare or some other broader sense. The courts, generally, will not allow as a defense in an antitrust case an argument that competition itself is against the public interest."

He explained that competition may result in primary care providers being better paid than specialists in a managed care marketplace dominated by primary care "gatekeepers" and competition may result in a shift of the supply imbalance as it affects the career objectives of medical school graduates.

"If a residency review committee or other private body with comparable authority attempted to place a cap on the number of approved residencies in the country in a particular field or to bar new residency programs in a field, for the express purpose of limiting entry into a specialty and thereby encouraging entry into primary care fields, the action could be challenged," Lerner said.

However, a residency review commission or other accreditation body could disapprove a residency program because of actual inadequacies in its program.

"The former is a restraint in competition; the latter enhances the quality of the education and training provided and is much more defensible," he said.

Purpose is key

He told the conference that there could be a legal problem for a residency review committee if it decided to regulate the number of residencies by raising the criteria for approval. Raising standards could be challenged if the underlying purpose was to shrink entry in the program.

"If an academic medical center decided to drop a particular residency program and add another one, there is no particular antitrust implication because there is no conspiracy," he said. "It is simply a unilateral business decision.

"If two hospitals decided to merge their residency programs and to put more emphasis on primary care residency and less on specialty programs, unless you can prove that this would result in an overall lessening of competition in some areas in the country, this type of selective activity and joint production of residency education probably is not a problem."

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