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Vanderbilt Law Review

First Page

233

Abstract

The skyrocketing costs of health care services for the American people constitute a crisis of national importance.' The seriousness of this crisis is reflected in the attention that antitrust enforcement agencies of the federal government are giving to the health care industry. The agencies are responding, at least in part, to the common perception that these skyrocketing costs result as much from the restrictive trade practices of the health care industry as from the growing use of sophisticated technology and inflation. Competition is viewed as an antidote to increasing prices and antitrust laws as the vehicle by which federal agencies such as the Federal Trade Commission (FTC) and the antitrust division of the Department of Justice (Justice) may administer the antidote.

One practice of the health care industry, the use of relative value guides (RVGs), is currently receiving close scrutiny by the FTC and Justice, both of which characterize RVGs as anticompetitive in purpose and effect.' A RVG is an index of services that assigns each service a value equal to a number of arbitrary units.' The user of a RVG can compute the price of a particular service by multiplying a conversion factor, the value of one unit, with the number of units assigned to that service. RVGs, first published by the medical profession in 1956, probably affect price formation. Whether RVGs constitute price fixing, conduct illegal per se under the antitrust laws, however, remains unclear.

In 1975 Justice initiated the first formal challenge to the legality under the antitrust laws of a medical association's RVG in United States v. American Society of Anesthesiologists.,' Anesthesiologists is the only action initiated by Justice or the FTC against RVGs that went to trial.' In the other actions the defendants signed consent orders prohibiting them from further development or dissemination of RVGs." Therefore, the decision of the Anesthesiologists court, upholding the use of a RVG, threatens to frustrate the efforts of the FTC and Justice to prevent physicians' groups from formulating and using RVGs. After reviewing the applicable case law under the Sherman Act, this Recent Development focuses on the impact of United States v. American Society of Anesthesiologists on the law of antitrust. The Development concludes with a consideration of the legality of RVGs and the proper role of RVGs in the fight against increases in the costs of health care.

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