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Government Declares War on Doctors

I was going to include this article in the rest of the Healthcare Update, but pulled it out and made it a separate post after reading this related article in the Christian Science Monitor – “Justice Department declares war on doctors”

Five orthopedists sued for antitrust violations and settle case.

Workers compensation in Idaho wasn’t paying enough, so these orthopedists allegedly colluded to refuse to treat any workers compensation patients until the state raised the rates that were being paid. In addition, several of the physicians allegedly threatened to stop seeing Blue Cross Blue Shield patients because Blue Cross payments were insufficient. Orthopedists across Idaho even published articles in the newspapers regarding the Blue Cross dispute. Now, as a result of the settlement, the orthopedists won’t be able do this same thing in the future.

Other documents from the antitrust case are contained here.

The assistant attorney general stated that “The orthopedists who participated in these group boycotts denied medical care to Idaho workers and caused higher prices for orthopedic services.” No word on when this brainiac is going to file suit against all the state and government hospitals that deny care and cause higher medical prices. Oh. Forgot. States and insurance companies are exempt from antitrust actions, so no one can sue them for colluding to deny care.

I think I’ve discovered how patients will be guaranteed care under the new health care proposal. If too many doctors stop seeing Medicare and/or Medicaid patients because the reimbursement is too low, the Justice Department will just step up its antitrust enforcements.

Watch what happens to speed and quality of care then …


  1. Workmen’s Comp patients should be seen just as fast as the state pays their claims.

  2. Legally, what these guys did wrong is they talked to each other about what they were going to do.

    If each had acted independently then the government wouldn’t have had a case. By talking to each other about their plans, they made it a “conspiracy”.

    Medical associations that encourage their members to take similar actions face possible legal threats as a result.

    Problem with cases like this is that they pretend that doctors and insurance companies have equal power during rate setting negotiations. They don’t. Doctors acting alone are always at a disadvantage. It is only when they get together to make a group decision that they have leverage. DOJ has fired a cannon shot across the bow, this won’t be allowed in the future.

  3. In Canada workers comp is the fastest payer and pays enhanced rates because it wants people treated and back to work quicker. It is way more costly to a comp claim to have the worker on a prolonged disability than to pay the doctors to expedite care, especially when you consider that each month off work decreases the chance of ever returning to work…
    It makes no sense to me that workers comp would be adversarial with doctors, since it likely costs them money in the long run?
    Then again I guess there is very little in health administration that makes sense..

  4. A similar thing happened where I used to practice in Ky. There were 2 orthopedic groups in the community, and both independently decided to stop seeing medicaid patients, due to the reimbursement being less than the overhead. They were taken to court, and eventually exonerated because they had not discussed this action with one another and there was no conspiracy – still had to spend the time and money defending themselves. Basically I dont think you can discuss much regarding business decisions with the other doctors in the community without running afoul of some law or other.

  5. Dave: That’s ironic, isn’t it, since we’re now being encouraged to post prices to improve “transparency.”

  6. I would hope that from the time they were first contacted about the possibility of legal action, all doctors involved refused all worker’s compensation and Blue Cross Blue Shield patients for the rest of thier careers. The government can win thier case and still have no doctors to push around, effectively losing thier case. Let the patients demand that the governemnt stop removing doctors from serving their needs.

  7. But how is what these doctors did any different from some other industry colluding (say meat packing) to raise their prices? Different products but both meat packers and doctors are essentially in the service/product providing industry (IMO). So I agree with the DA, it was an antitrust violation, not some “war on doctors”.

  8. My question is this…what is the line between price fixing and protest? If the orthopedic society and the doctors publicly announced that they were going to drop Workman’s comp in protest of the low reimbursements would that change anything? It sounds like they did this in a slow, deliberate, and (most importantly) non-public manner so does that make it more like collusion and less like the protest that it was probably meant to be? Does it even matter?

  9. Anonymous, you have a point. The doctors however know that the insurance firm they have decided not to deal with is not going to raise their payments, unlike the consumer who would have to pay more for meat. They’ve just decided not to deal with that entity. The patient might have to travel further to get evaluated but it isn’t going to cost more. It’s a moot point, though, the way the laws are written.
    This is going to be more of an issue in the future if Congress keeps dithering around with pay cuts for medicare. I am a hospitalist now, but can tell you that the profit margin for a primary care doctor seeing a medicare patient in his/her office is pretty slim, and a 21% pay cut would erode it to a level where a lot of docs would think that the reimbursement isn’t worth the work and liability. This worries me, and I am speaking from the viewpoint of a patient who willl soon be on medicare rather than as a doctor.

  10. Also…if those cuts are made permanent and providers start dropping medicare patients they could be looking at a double whammy from an investigation into price fixing if two or more doctors in a certain (yet undefined) geographic area drop medicare within some short (yet undefined) time period. Dave has already pointed out how expensive and time consuming a defense of that charge can be…are we going to see a tidal wave of investigations triggered by too many doctors dropping medicare in a rapid fashion if cuts are made permanent?

  11. So myself and the rest of the commenters on this thread may regret this invitation…but I am honestly curious and he would be the one to know…

    Matt- any thoughts from the legal perspective on this case? Based on what is available in the media- do you think the DOJ has a good case against these doctors? How would doctors ensure they wouldn’t get caught up in one of these cases?

  12. Can someone explain to me why doctors aren’t allowed to unionize? And what exempts unions from “collusion”?


    • The simple answer is that doctors are largely self-employed. Maybe the doctors working at a particular hospital could all form a union in order to collectively bargain for their compensation and working conditions, but for a bunch of individual business owners to collude together to raise prices is pretty much the classic example of price-fixing.

      There may be laws against going on strike for essential workers like doctors or air traffic controllers, but I’m pretty sure they would be permitted to form a union in this situation.

  13. Andrew, I think historically a lot of big companies tried to use “new” anti-trust laws against unions in order to break them up. I believe it worked for a while (in the courts) until they passed a new law that fixed the problem. It’s been a while since I’ve taken American History so I might be wrong.

    Anyways though, lots of groups that are considered directly essential to society (doctors, teachers, emergency response personnel, etc) aren’t allowed to unionize, or can only form limited unions.

    • “Anyways though, lots of groups that are considered directly essential to society (doctors, teachers, emergency response personnel, etc) aren’t allowed to unionize, or can only form limited unions.”

      ????? At least in Cali most teachers, firefighters, police belong to unions. Doctors…No

  14. And so it begins. Physicians have only themselves to blame for coming to this point. For too long they ignored the obvious problems coming, and here we are.

    This phrase: “Watch what happens to speed and quality of care then …” has become an empty threat. It’s overused and the public doesn’t believe it anymore.

    • Check in as a patient at your nearest VA hospital and see how empty the threat is. Or maybe you can go to an air force base for an appendectomy.

      • I can’t – I’m not a veteran. But you see, you’re not comparing apples to apples. Your analogies often fail because you don’t think them through enough, and this one is no exception.

        Besides, you’ve never set a baseline for the speed or quality we can expect if we do any of the things you want, so it’s an empty threat to say it’s going to be less.

    • …no, actually I think we were looking for something NEW as a reply, not a copy-paste from your previous replies.

  15. The government thinks medicine is business, people think medicine is business; then why don’t Doctors also treat it as a business? Generate revenues, maximize profits and NOT worry about evidence based medicine…

  16. It is true, profit before care! Who gives a damn if someone is in pain and suffering. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

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