Preferred provider organizations, price-fixing and Section 1 of the Sherman Act

The economic forces that bring the products of any market to fruition cannot proceed through history unrestrained. Society must maintain a sense of control over its economic market if the fruits of this market are to benefit all. The two forms of control that society has sought to apply in the past are (1) procompetitive restrictions and (2) anticompetitive regulations. The health care industry, however, is one which traditionally has been exempt from these private market restrictions. Throughout its history, the health care industry has discouraged its members from engaging in competition. For years, the industry had been allowed to develop its own peculiar "guild" system of economics. Today, this system is being challenged by proponents of a more traditional "market" approach. Under this new approach, a competitive market determines prices, encourages efficiency, maintains quality and spurs innovation. A response to this procompetitive system has been the advent of Preferred Provider Organizations (PPOs). Preferred Provider Organizations have rapidly increased in number in response to soaring health care costs. Government antitrust enforcement agencies have encouraged the growth of PPOs because they help bring needed competition to the health care field. A problem with the "encouragement" is that it frequently runs amuck of antitrust regulations. In these situations, one should look at whether there is agreement with Section 1 of the Sherman Act.