The Federal Trade Commission
The next assault on the self-regulation of the professions came in the 1970s from the concern of the courts and the FTC about anticompetitive practices. This was not the first time the FTC had entered medical society politics. As early as the 1930s, it had brought legal action against certain medical societies for blacklisting physicians who participated in prepaid medical plans. These antitrust efforts died out during World War II and were not resumed in earnest until the 1970s.
The case that finally reached the Supreme Court involved attempts by a bar association to fix fees. In Goldfarb v. Virginia State Bar, [ Goldfarb v. Virginia State Bar, 421 U.S. 733 (1975) ] the U.S. Supreme Court held that the delegation of authority to professional societies to conduct peer review did not encompass a grant of authority to engage in price fixing. This decision was followed by a ruling against an engineering society that held that attempts to manipulate technical standards to benefit one competitor over another, hidden in the guise of standards to protect the public, would not be allowed. [American Soc’y of Mechanical Eng’rs v. Hydrolevel, 456 U.S. 556 (1982) ] The result of these rulings has been an effort by the FTC and private litigants to force professional societies to refrain from anticompetitive actions.
The effect of FTC enforcement actions and private litigation has been perverse at times. Exemplary attempts to establish objective standards for medical practice (such as the Academy of Pediatrics’ “Blue Book”) have been thwarted because of the fear of litigation. Simultaneously, some practitioners have used threats of antitrust litigation to suppress criticism of questionable procedures or marketing practices. A cynical observer might say that the FTC has removed curbs on unprofessional practices, which has increased the cost of medical care by increasing the marketing of dubious procedures. Except for the certification activities of the large professional societies, the control of medical staff privileges has passed from local medical societies to hospital and other corporate committees.