Monopolies, Maricopa, and marketing: a case study

The development of preferred provider organizations in recent years has caused significant concerns about the antitrust implications of these new organizational arrangements among healthcare providers. The potential of being accused of price-fixing, monopolistic, or anti-competitive activity has concerned many health professionals involved in establishing PPOs. This article presents the nature of some of the antitrust arguments and a few representative cases demonstrating various rulings about the anti-competitive elements present or absent from various PPO arrangements. In addition, selected state and federal legislation concerning PPOs is discussed. In addition to understanding the antitrust issues involved in PPOs, establishing a PPO also requires the active involvement of the various key players in determining structural and pricing arrangements. The case study presented here demonstrates the use of marketing principles which emphasize the importance of participation and communication in decision making with physicians in the formation of a PPO.