I agree with the above.. But i would go a step further.. the greatest threat to the profession is awarding exclusive contracts to groups period..
This area is well litigated and would take pure luck to win a very expensive lawsuit and change the law to correct or a powerful member of congress needs to champion the cause to pass a bill through Congess.
from;
http://www.plusweb.org/Downloads/Events/Anti-kickback Article - Final.DOC
2.3.1 Exclusive Contracts
Exclusive contracts are generally recognized as one of the oldest and most accepted forms of economic credentialing, and have been legitimized in the courts for many years. The term refers to the decision by a hospital governing body to grant an exclusive contract to a single provider group to handle all of the hospitals needs in a particular specialty. Such contracts are very typically awarded for the hospital-based services, such as radiology, pathology, anesthesia, and emergency medicine. Obviously, once a hospital has awarded an exclusive contract for a particular hospital department, all other applicants for privileges in that specialty area will be turned down, regardless of their individual competence and professional qualifications.
Although exclusive contracting has been called a form of pure economic credentialing, most courts have recognized that one of the primary reasons hospitals enter into exclusive contracts is to enhance the quality of care in the department. The New Jersey case of Belmar v. Cipolla, gives a comprehensive look at the interplay between economic and quality factors in a hospitals decision to enter into an exclusive contract. In that case, the New Jersey Supreme Court upheld the decision by Community Hospital to grant an exclusive contract for anesthesia services. The court noted, as an initial matter, that a hospitals responsibility is broader than simply providing a place where sick people receive treatment. It must ensure the availability of appropriate personnel and equipment needed to provide that care:
In providing necessary treatment, a hospital must have available numerous doctors, nurses and attending staff. It must provide operating, recovery and patient rooms; as well as medicines, food, beds, and support equipment Payment of hospital bills by third-party payors (private insurance companies or governmental agencies) requires a complicated billing and collection system. State and federal regulations add to the administrative burden. In short, a hospital is a complex business vitally affected with a public interest.
The court then reviewed the benefits, from the hospitals perspective, of having an exclusive anesthesia contract. They included: better use of operating room personnel, the ability to process more operative procedures, the avoidance of fee splitting between surgeon and anesthesiologist, and better 24 hour coverage. These cited benefits have clear quality implications, and the New Jersey high court regarded them as reasonable. The court summarized: the evidence points to the conclusion that the decision to enter an exclusive contract for the provision of anesthesia services was motivated by the hospitals desire to insure a high standard of medical care.
This case illustrates that economic credentialing is not a matter of pure economics: it is a function of a hospitals decision to enter into a business relationship with a specified group of providers for the purpose of providing more efficient and higher quality care.
From;
http://www.mcguirewoods.com/news-resources/publications/commercial_litigation/peer_review.doc
B. Basic Standard.
The more flexible rule of reason, not the per se rule, is the prevailing standard of analysis in the typical privileges case involving the denial or termination of medical staff privileges. The leading case on this issue, while outside the health care field, is Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., which involved the expulsion of the plaintiff from a marketing cooperative. There, the Supreme Court held that per se treatment of such group boycotts should be limited to those situations in which the plaintiff proves that the boycotting group possesses market power or exclusive access to an element essential to effective competition. . . . [Otherwise,] the conclusion that expulsion is virtually always likely to have anticompetitive effects is not warranted.
Thus, the rule of reason has been applied to the vast majority of cases involving the termination or revocation of staff privileges. The rule of reason also has been applied to situations in which physicians have been denied privileges and excluded from practicing at a hospital.
In addition, the courts have declined to apply the per se rule to claims that staff privileges denials constitute illegal tying arrangements. In Jefferson Parish Hospital District No. v. Hyde, the plaintiff characterized a hospitals exclusive contract with an anesthesiology group as a tying arrangement. The Supreme Court held that a tying arrangement is per se illegal only where the defendant has market power over the tying product. In that case, the Court found that there was no evidence of the defendant hospitals market power in the tying product market for hospital services sufficient to force consumers to change their purchasing choice in the tied product market for anesthesia services. Thus, the rule of reason was applied. Similarly, in Scara v. Bradley Memorial Hospital, the court rejected a claim that an exclusive contract between a private anesthesiology group and the hospital was a per se illegal tying arrangement where the hospital had no economic interest in the tied product (anesthesiology services), and did not have sufficient economic power in the tying product (surgical services) to appreciably restrain competition. More recently, in County of Tuolumne v. Sonora Community Hospital, the Ninth Circuit rejected a claim that a hospitals decision to allow only obstetricians to perform C-sections was a per se illegal tying arrangement where the hospital had no economic interest in the tied product (C-section services). The Ninth Circuit also held that the plaintiffs failed to meet their burden of proof to satisfy an illegal tying agreement under a rule of reason analysis.
