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A Sherman Antitrust Act Application Question

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State Capital, in the state of Anywhere, has three hospitals. You are the Chief Operating Officer of Best Medical Center, which is affiliated with the state's tertiary care center and teaching hospital 60 miles away. Although not the largest hospital in State Capital, it does offer a variety of specialty and boutique services and clinics. One of its clinics specializes in cardiac rehabilitation and offers a broad range of services to patients with cardiovascular disease. The other two hospitals also offer cardiac rehabilitation, although their services are not as sophisticated and not centrally coordinated. Two years ago Best Medical Center entered into an exclusive contract with a cardiology practice in State Capital. Recently, a new cardiologist Dr. Will moved into the area and applied for medical staff privileges at your facility, which were denied based on the exclusive contract with the cardiology practice. Dr. Will has threatened to sue on the grounds that the denial of privileges is a violation of Sections 1 and/or 2 of the Sherman Antitrust Act. Will Dr. Will succeed in such a lawsuit? Explain the reasoning behind your assessment.

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Solution Preview

Hi,
Hope this discussion helps you understand the Sherman Antitrust Act as it applies in the medical field.
Thanks for using BrainMass.

To answer the question it is important to understand how the Sherman Antitrust Act works. The Act was designed to preserve free and unfettered competition as a rule of trade. Section 1 of the Act prohibits contracts, combinations, and conspiracies in restraint of trade. Section 2 prohibits monopolization, attempted monopolization, and conspiracies in restraint of trade. Read as such it would seem that Dr. Will could succeed in his sue. In able to determine if there is a violation of the Act, it must be analyzed in each of its basic antitrust principles.

a)The concept of the agreement
To be in violation of the act, two or more entities must have reached an agreement that can expressed, implied, or tacit have an anticompetitive purpose. A provider of services agreement that limits the practice of other ...

Solution Summary

The solution includes a discussion of the Sherman Antitrust Act as it applies to a doctor's priviledge to practice in places depending on the area of coverage and market. It analyzes the possible scenarios that would influence a lawsuit outcome.

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