The confrontation between national health planning and the federal anti-trust laws.

Abstract

The confrontation was inevitable. The Federal Government has for many generations since 1890 been dedicated under the Anti-Trust Laws to competition among enterprises and to the prevention of business monopoly and monopolistic practices. recent years, however, the health planning programs enacted by Congress and by many states have embarked upon course in exactly the opposite direction. It has been decided that competition on price, availability, and quality of clinical services in the health care industry is not generally in the best interests of the people of this country. Cooperation even to the extent of monopoly is being encouraged and mandated by health planning agencies established under federal grants and controlled tightly by increasingly detailed federal regulations. Competition among similar clinical services has been determined to be waste of scarce resources. Monopoly has been found to be cost efficient and is therefore promoted. These may seem to be severe statements. They are not. the most important of the court cases to face this issue, the Court found that there was a plain repugnancy between the National Health Planning and Resources Development Act of 1974 (Public Law 93-641) and Anti-Trust Laws. The Court quoted Representative Paul Rogers, the law's most prominent sponsor, speaking on the floor of Congress: In enacting Public Law 93-641, . . . the Congress made specific judgment that control of the development of health care facilities was needed even though price and service competition might be restrained, and created health planning system that could promote the efficient use of health resources through the regulation of and voluntary action of providers.' The most direct control mechanism utilized by the health planning agencies in regard to capital development and acquisition has been the requirement of certificate of need-a concept borrowed from the field of public utilities, field of monopoly business. the first major court confrontation on this issue, the North Carolina Supreme Court found the State Certificate of Need Law to be unconstitutional as violation of the anti-monopoly provisions of the North Carolina Constitution.2 Most of the anti-trust laws in this country, both federal and state, are statutory, not constitutional. Therefore the North Carolina decision did not have great impact in other states or upon the federal program. It remained for the issue to be joined directly between the two opposed federal legal policies in Federal Court reviewing an application of the programs of Public Law 93-641. That has now happened in two Federal District Courts in different parts of the country. These Courts are at the trial level, the first level, of the federal system and cannot be considered at all the last word on the subject. It is very important, however, that both Courts found that the Health Planning Law was clearly in conflict with the Anti-Trust Laws and also ruled that the application of the earlier Congressional enactments were impliedly repealed in relation to the activities of health provider organizations acting in compliance with the health planning program. The latest case, National Gerimedical Hospital and Gerontology Center v. Blue Cross ofKansas City, 3 follows similar conclusion reached in Port Huron Valley Hospital, Inc. v. City ofPontiac.4 There were number of other issues examined and decided in the National Gerimedical Hospital case, including the ruling that Blue Cross contracts with providers are covered under the Anti-Trust Laws and are not exempt as the business of insurance. this respect, the Court was following the quite recent ruling of the U.S. Supreme Court in the Royal Drug case.5 the particular case, Blue Cross of Kansas City had refused to accept National Gerimedical Hospital as participating hospital in the Blue Cross program. The reason for the refusal was that the Hospital had not sought and had not received voluntary certificate of from the local health planning agency acting under Public Law 93-641. Blue Cross therefore refused to recognize the Hospital as filling a clearly evident need in the geographic area being served. The Hospital was not allowed to bring evidence to Blue