A Win for Competition

Managed Healthcare Executive

Stuart M. Gerson, a Member of the Firm in the Litigation and Health Care & Life Sciences practices, in the firm's Washington, DC, and New York offices, authored an article in Managed Healthcare Executive, titled “A Win for Competition.”

Following is an excerpt:

The American system of healthcare delivery, management and insurance is in a state of dynamic change and many of the most innovative developments aimed at efficiency, quality and cost savings are originating with managed care organizations (MCOs). Too often, innovation is met by what the economist Milton Friedman called “the tyranny of the status quo”—the resistance of entrenched guilds to allow productive competition. For occupants of MCO C-Suites faced with such resistance, there is good news both from the Supreme Court of the United States and the Federal Trade Commission (FTC).

Recently, the Supreme Court held that the North Carolina Dental Board was not insulated from federal antitrust liability under the so-called “state action” doctrine when it engaged in anticompetitive conduct to restrain non-dentists from performing teeth whitening services. The Court reaffirmed that state action antitrust immunity for professional board regulatory actions has two prerequisites: the actions must be conducted under “active state supervision,” and they must follow a “clearly articulated state policy” to displace competition.