¹ Organized professions have frequently been characterized as cartels. See, e.g., Horowitz, , The Economic Foundations of Self-Regulation in the Professions, in Regulating the Professions 3, 9 (Blair, R. & Rubin, S. eds. 1980)Google Scholar. Because the term is pejorative, however, care must be taken not to let it interfere with sound analysis of particular conduct. As the discussion in Part One makes clear, collective action may be precompetitive and lawful even when undertaken for solely private, self-interested purposes.

² Most foreign health systems, such as the British National Health Service, are explicitly monolithic. Even where private organizations have a role, pluralism is more apparent than real. See Van Langendonck, , Private Diligence Versus Public Inertia? The Use of Private Sick Funds for Manpower Policy Under National Health Programs in Western Europe, in National Institutes of Health, Changing National-Subnational Relations in Health: Opportunities and Constraints 159, 168 (1978)Google Scholar (“Clearly, the sick funds can only influence to a very limited extent the standards of care provided by the medical profession.“). The U.S. system is also less pluralistic than it seems but now possesses, partly because of the antitrust laws, a potential for evolution and diversity that is unique in the world. See Havighurst, , Decentralizing Decision Making: Private Contract Versus Professional Norms, in Market Reforms in Health Care 22 (Meyer, J. ed. 1983Google Scholar.

³ Although the antitrust laws establish as national policy that competition and decentralized decision making are to guide the health care industry except as otherwise provided by explicit regulatory legislation, the implications of this policy for consumers’ autonomy and range of choice are seldom fully appreciated. Sociologist Paul Starr once observed that health care is not “a technical activity like water supply,” but is instead “primarily a social activity like education.” Starr, A National Health Program: Organizing Diversity, Hastings Center Rep., Feb. 1975, at 11. He went on to express some admiration for a decentralized (though not necessarily a free-market) system:

Id. at 15. For a recent endorsement of a pluralistic, competitive health care system by a philosopher, see P. Menzel, Medical Costs, Moral Choices: A Philosophy of Health Care Economics in America (1983).

⁴ See discussion infra text accompanying notes 76-98. The historical roots of this view have been documented by sociologist Paul Starr, who has observed the medical profession's rise to a position of “cultural authority, economic power, and political influence.” P. Starr, The Social Transformation of American Medicine (1982). See Also J. Berlant, Professional and Monopoly (1975); E. Friedson, Profession of Medicine: A Study of the Sociology of Applied Knowledge (1971); E. Freidson, Professional Dominance: The Social Structure of Medical Care (1970). The profession's long control of its legal, economic, and institutional environment has induced a habitual “guild mentality” that it is the business of antitrust law to break down. Weller, , Antitrust and Health Care: Provider Controlled Health Plans and the Maricopa Decision, 8 Am. J.L. & Med. 223, 224 (1982)CrossRefGoogle Scholar. On the specific mechanisms of professional dominance, see infra text accompanying notes 87-98. Even where the profession does not exercise actual control of the decision making apparatus, its norms and standards are widely respected and tend to limit the scope of innovation. See generally Havighurst, supra note 2.

⁵ See Part One, nn. 6-8 and accompanying text.

⁶ Legally, the concern is whether standardization is achieved by agreement not to produce nonstandard items. Naked agreements not to depart from standards are unlawful and are fundamentally distinguishable from collective promulgation of standards, voluntary compliance therewith, and certification of such compliance. See infra notes 128-33 and accompanying text. Of course, participants in an organized health plan such as an HMO may agree to standards because their joint venture, if not so large as to threaten competition, is procompetitive. Another exceptional situation is presented in, Vest v. Waring, 1983 Trade Cas. (CCH) ¶ 65,419 (N.D. Ga. 1983), where a powerful organization of ophthalmologists declared it unethical to perform a new surgical procedure outside the framework of a major research study being mounted to determine whether the procedure was safe and efficacious. The formation of such a joint venture to conduct a scientific study is defensible on efficiency grounds, and the profession-wide agreement to cooperate with the study seems reasonably ancillary to the goal of bringing as many procedures as possible within it. The case is a difficult one, however, because the social value of the research depends upon the inability of consumers choosing in a free market to distinguish efficacious procedures from worthless ones. See, e.g., A. Cochrane, Effectiveness and Efficiency: Random Reflections on Health Services (1972). Only judicial notice of such a market failure would justify agreements among physicians to limit performance of the procedure until evidence was collected to establish its value. Of course, the study should be designed as unrestrictively as feasible, so that participation in it is open to all qualified ophthalmologists.

⁷ The policy arguments for and against occupational licensure raise similar questions: “[T]he prohibitive cost of information makes it impossible for consumers to distinguish competent from incompetent sellers of certain professional services. Regulation prohibiting the sale of such specified minimal standards of expertise is thought to protect consumers from incompetence and fraud.” Martin, Will the Sun Set on Occupational Licensure?, in Occupational Licensure and Regulation 142-43 (S. Rottenberg ed. 1980). See also Wolfson, et al., Regulating the Professions: A Theoretical Framework, in id. at 180, 190 n.8 (citing many of the most important works); Part One, nn. 63-73 and accompanying text. For licensure to be both equitable and efficient, the savings it achieves—in search costs (though searching is still advisable) and by preventing mistaken choices—must exceed the consumer surplus lost due to price increases, including any losses due to decisions to forgo treatment. Much depends, therefore, on the political system's ability to choose the right minimum standard. There is recent evidence that public licensure has not provided the theoretically expected benefits. See generally, Occupational Licensure and Regulation (especially Rottenberg, Introduction at 8-9, summarizing the conclusions of the literature). Presumably, private regulation by affected interests would be even less likely to strike the optimal balance between quality and cost considerations and to prevent providers from unduly appropriating consumer surplus.

⁸ “Free choice of a physician is the right of every individual.” Judicial Council, AMA, Current Opinions of the Judicial Council of the AMA 1981, 29 (1981). See also Olson, , Introduction, in A New Approach to the Economics of Health Care 643 (Olson, M. ed. 1981)Google Scholar.

⁹ See Letter from Daniel C. Schwartz, Acting Director, Bureau of Competition, FTC, to Edward Aguirre, U.S. Commissioner of Education (Nov. 11, 1976); Statement of Daniel C. Schwartz before the Advisory Committee on Accreditation and Institutional Eligibility, U.S. Office of Education (March 24, 1977). The FTC challenge was not based on antitrust principles but on the Commissioner's own criteria. For a theoretical antitrust challenge to the LCME that seems poorly conceived in light of the analysis in Part One, see Note, Restrictive Practices in Accreditation of Medical Schools: An Antitrust Analysis, 51 S. Cal. L. Rev. 657 (1978)Google Scholar. Discussion infra text accompanying notes 165-70 suggests an entirely different antitrust theory for attacking the LCME, however—one that reflects (as the student author's theory does not) the concerns developed in the text.

¹⁰ Letter from Clark C. Havighurst and Gaylord C. Cummins to Ernest C. Boyer, U.S. Commissioner of Education (Designate) (March 9, 1977).

¹¹ After the famous Flexner Report in 1910, a new accreditation program, largely borrowed from Johns Hopkins University, rigidly standardized medical education and gave it a heavily academic emphasis that remained in place for at least a generation. See R. Stevens, American Medicine and the Public Interest 66-73 (1971); Kessel, , Higher Education and the Nation's Health: A Review of the Carnegie Commission Report on Medical Education, 15 J.L. & Econ. 115 (1972)CrossRefGoogle Scholar; Kessel, , The AMA and the Supply of Physicians, 35 Law & Contemp. Probs. 267 (1970)CrossRefGoogle Scholar. Much greater educational variety appears today, but the range of innovation may still be excessively narrow. See generally I. Lewis & C. Sheps, The Sick Citadel: The American Academic Medical Center and the Public Interest (1983); P. Feldstein, Health Care Economics, ch. 15 (1979); Wallis, Med School, Heal Thyself, Time, May 23, 1983, p.54. See also infra notes 13, 17-20; Petersdorf, , The Doctors’ Dilemma, 299 New Eng. J. Med. 628 (1978)CrossRefGoogle Scholar, and Perkoff, , General Internal Medicine, Family Practice, or Something Better?, 299 New Eng. J. Med. 654 (1978)CrossRefGoogle ScholarPubMed. The latter two references discuss the strong standardizing influence of academic medical center training on students of internal medicine.

¹² “Generally, directors of graduate programs are aware of the need to provide an educational program that will effectively prepare graduates of their programs to become certified in a specialty. Resident physicians recognize the importance of certification by the boards and are aware of the pressures to meet the requirements of the boards satisfactorily.” AMA, 82nd Annual Report on Medical Education in the U.S., 248 J. A.M.A. 3225, 3233 (1982)Google Scholar.

¹³ Debate over the proper balance between scientific and clinical training was an important aspect of the early struggles between generalism and specialism in medicine. See R. Stevens, supra note 11, at 43-44, 115-16. Proposals to create an alternative type of physician with less scientific training, see, e.g., McDermott, , General Medical Care: Identification and Analysis of Alternative Approaches, 135 Johns Hopkins Med. J. 292, 313 (Nov. 1974)Google Scholar, have been poorly received by the education establishment. See, e.g., W. Anlyan, et al., The Future of Medical Education, ch. 10 (1973). Such proposals are threatening to professional solidarity and inconsistent with the prevalent view that there is one right way to train physicians, which must be discovered and implemented by the system. For an illustration of this view, see Eichna, , A Medical-School Curriculum for the 1980's, 308 New Eng. J. Med. 18 (1983)CrossRefGoogle Scholar, and Correspondence, 308 New Eng. J. Med. 1230 (1983)Google Scholar.

¹⁴ Under a regulatory or manpower planning approach, manpower needs are assessed prospectively on the basis of estimates of technological and demographic developments, and educational resources are mobilized to turn out the needed products. In a system based on decentralized decision making, private estimates by educators supplying and students demanding training guide the system and are constantly subject to reexamination; good estimates of future supply and demand conditions are rewarded and poor ones punished. Strong sentiment for manpower planning appeared in the work of the Graduate Medical Education National Advisory Committee (GMENAC), discussed infra note 20. See also Comanor, , Health Manpower and Government Planning, 5 Reg. 47 (May/June 1981Google Scholar). Although the system currently lacks direct control over educational pipelines and the federal government has only limited tools, mostly subsidies, at its disposal, accrediting and credentialing practices facilitate standardization of personnel types and can exert some influence over supply by raising training costs and limiting training opportunities.

¹⁵ See supra note 11. Consistent with the preference for standardization, specialty certification requirements reveal a preference for academic over practical training, the latter being gradually phased out as an entry pathway in each specialty over time. See Part One, n. 35. A good example is the newly approved American Board of Emergency Medicine, whose “practice category” for examination eligibility will expire in 1988, after which time all candidates must be trained in approved residency programs. See American Board of Emergency Medicine, Policies and Procedures 5-6 (1982). The same trend toward academicization and standardization of training is visible in nonphysician health professions as well. See Part One, n. 51 and accompanying text.

¹⁶ For discussion of the relationships between physicians and nonphysician health professionals, see infra notes 163-64 and accompanying text.

¹⁷ Expansion of the roles of paraprofessionals, especially those of “physician extenders,” reduces the realm of physicians’ exclusive competence and may threaten them with loss of their gate-keeping function. See, e.g., Harrell, , Are Doctors Necessary for Primary Care?, 53 J. Med. Ed. 365 (1978)Google Scholar (proposal that physicians leave all primary care to nonphysician practitioners and act only as specialists, consultants, and referees). On emerging uses for computers, see, e.g., Miller, et al, INTERNIST-I, An Experimental Computer-Based Diagnostic Consultant for General Internal Medicine, 307 New Eng. J. Med. 468 (1982)CrossRefGoogle Scholar; Barnett, , The Computer and Clinical Judgment, 307 New Eng. J. Med. 493 (1982)CrossRefGoogle Scholar.

¹⁸ Medical educators have been criticized for overemphasizing hospital-based acute care and inadequately preparing physicians to provide primary care. See, e.g., Alpert & Charney, The Education of Physicians for Primary Care (DHEW Pub. No. HRA 74-3113, 1973). In addition, no medical school is known to have undertaken the training of physicians specifically for practice in health maintenance organizations or other innovative settings. An HMO once reported that residency programs in its hospitals were forced by accreditation requirements to be “rather traditional.” Shearn, , Professional Education in a Service System, in The Kaiser Permanente Medical Care Program 123 (Somers, A. ed. 1971)Google Scholar.

¹⁹ Medical education is frequently blamed for promulgating, and certainly is responsible for reinforcing, the widely noted cost-is-no-object ideology that came to pervade medical care in the age of insurance. See V. Fuchs, Who Shall Live? Health, Economics and Social Choice 59-60, 145 (1974). This ideology strengthened and was used to justify professional resistance to cost containment. See Havighurst, & Blumstein, , Coping with Quality/Cost Trade-offs in Medical Care: The Role of PSROs, 70 Nw. U.L. Rev. 6, 20-30 (1975)Google Scholar; see also infra text accompanying notes 97-99. On the clash between the dominant ideology and economizing HMOs, see supra note 18; Havighurst, & Bovbjerg, , Professional Standards Review Organizations and Health Maintenance Organizations: Are They Compatible?, 1975 Utah L. Rev. 381, 401-06Google Scholar.

²⁰ A currently prominent issue demonstrating the widespread preference for centralized over decentralized (market) decision making is the future supply of health manpower, a matter of great interest to both practitioners and educators. In the 1960s, a perceived shortage of physicians and other personnel led to governmental subsidies aimed at expanding supply. In the 1970s, warnings of an impending excess of physicians were heard, and the Graduate Medical Education National Advisory Committee (GMENAC) undertook to determine the proper numbers for each specialty and the proper balance of physicians and nonphysicians. GMENAC, Summary Report to the Secretary, Department of Health and Human Services (1980). Many discussions of the GMENAC report call for a consensus among health care decision makers to act upon its findings. E.g., Ginzberg, et al., The Expanding Physician Supply and Health Policy: The Clouded Outlook, 59 Milbank Mem. Fund Q. 508 (1981)CrossRefGoogle ScholarPubMed; Tarlov, , Shattuck Lecture—The Increasing Supply of Physicians, the Changing Structure of the Health-Services System, and the Future Practice of Medicine, 308 New Eng. J. Med. 1235 (1983)CrossRefGoogle Scholar; Lewis, AAMC Head Urges Tighter Accreditation to Limit MD Supply, Am. Med. News (NOV. 26, 1982). For a voice calling for reliance on market forces to determine supply, see Comanor, supra note 14. Interestingly, the AMA also takes a laissez-faire position. See AMA, 78th Annual Report on Medical Education in the U.S., 240 J. A.M.A. 2810, 2811 (1978)Google Scholar.

²¹ This expression appears in revealing quotations from medical society documents in FTC, Staff Report and Proposed Regulation Rule, Medical Participation in Control of Blue Shield and Certain Other Open-Panel Medical Prepayment Plans 160-61 (1979).

²² Unfortunately, the individual physicians who are most vulnerable to antitrust suits include many who have selflessly accepted responsibility for improving the profession's overall performance. The problem lies, of course, not in their motives but in the monopolistic premise underlying their efforts. Society, disappointed by the health care industry's inability to control its own costs, is surely justified in insisting, through application of the antitrust laws, on a new set of ground rules to govern professional activities.

²³ Discussion infra in text accompanying notes 54-58 shows how standardization of specialties served these goals. The references cited supra note 4 demonstrate the extent to which professional sovereignty and solidarity had to be carefully nurtured.

²⁴ See, e.g., C-O-Two Fire Equip. Co. v. United States, 197 F.2d 489, 493 (9th Cir. 1952); Milk & Ice Cream Can Inst. v. FTC. 152 F.2d 478, 482 (7th Cir. 1946); F. Scherer, Industrial Market Structure and Economic Performance 200-05 (2nd ed. 1980). In FTC v. Cement Inst., 333 U.S. 683, 715 (1948), there was evidence that the defendant price-fixers “had, in the interest of eliminating competition, suppressed information as to the variations in quality that sometimes exist in different cements.“

²⁵ For an analysis emphasizing interdependence in the dental services market, see Lipscomb, , A Political Economic Theory of the Dental Care Market, 72 Am. J. Pub. Health 665 (1982)CrossRefGoogle Scholar.

²⁶ Antitrust doctrine recognizes that certain concerted actions that do not themselves eliminate competition and certain consciously parallel conduct may be unlawful because they strengthen oligopolistic interdependence or otherwise facilitate oligopolistic behavior. E.g., United States v. Container Corp., 393 U.S. 333 (1969) (exchange of price information); Boise Cascade Corp. v. FTC, 637 F.2d 573 (9th Cir. 1980) (delivered pricing; proof of collusion or actual effect held lacking); In re Ethyl Corp., [1979-83 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 22,003 (1983) (final order) (price “signalling,” “most-favored-nation” clauses). On standardization as a facilitating mechanism, see references supra note 24.

²⁷ See generally Havighurst, , Professional Restraints on Innovation in Health Care Financing, 1978 Duke L.J. 303Google Scholar.

²⁸ For a case holding that the Medicare law prohibits recognition even of board certification as a basis for higher reimbursements, see Michigan Academy of Family Physicians v. Blue Cross and Blue Shield, 502 F. Supp. 751 (E.D. Mich. 1980).

²⁹ Accepting this basic premise, third-party payers have generally committed themselves to reimburse patients for their doctor bills up to some maximum amount per service derived by reference to prevailing fee levels. The most widely used reimbursement method—that of paying “usual, customary, and reasonable” fees—is ultimately based upon the assumption that most physicians, whose charges for insured services are subject to little competitive pressure, are ethical practitioners and therefore do not abuse their discretion. The implausibility of the assumption that pricing should be a matter of ethics or value of service, not competition, is a fair measure of the success of the medical cartel in having its way with those who spend consumers’ and taxpayers’ money for medical care. See generally Havighurst, & Kissam, , The Antitrust Implications of Relative Value Studies in Medicine, 4 J. Health Pol., Pol’y & L. 48 (1979)CrossRefGoogle Scholar.

³⁰ A recent trend toward the development of so-called “preferred provider organizations” (PPOs) is finally beginning to show what is possible. Organized by insurers and others, PPOs sharply distinguish among physicians on the basis of price and create incentives for patients to patronize lower-cost practitioners. See, e.g., Cassidy, Will the PPO Movement Freeze You Out?, Med. Econ., Apr. 18, 1983, at 262; Preferred Provider Organizations: A New Concept in Health Care, Fed. Am. Hosp. Rev., July/Aug. 1982. Qualitative and efficiency-related distinctions are harder to draw but are a natural next step. Although the antitrust laws are thought by many to inhibit selectivity by insurers and large medical groups, recent cases involving prescription drug plans suggest that these problems are minimal. See, e.g., Feldman v. Health Care Serv. Corp., 1982-83 Trade Cas. (CCH) ¶ 65,042 (N.D. Ill. 1982); Medical Arts Pharmacy v. Blue Cross and Blue Shield, 518 F. Supp. 1100 (D. Conn. 1981)aff'd, 675 F.2d 502 (2nd Cir. 1982); Sausalito Pharmacy v. Blue Shield of California, 1981-1 Trade Cas. (CCH)¶ 63,885 (N.D. Cal. 1981). These cases confirm the legal status of price agreements between insurers and providers that the Supreme Court left unresolved in Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979). On the importance of such contracts and selectivity, see Havighurst, & Hackbarth, , Private Cost Containment, 300 New Eng. J. Med. 1298 (1979)CrossRefGoogle Scholar.

³¹ Thus, when a service is one that both nonphysicians and physicians can lawfully provide, insurers and government are at a loss to know what to do. Some have sought to maintain the integrity of their reimbursement systems by refusing to pay for the services of such nonphysicians as chiropractors and clinical psychologists, thus occasioning numerous state laws compelling insurance coverage of services provided by various categories of nonphysicians. See Selected State Statutory Provisions Relating to the Insured's Choice of Provider and to Reimbursement Practices, State Health Legis. Rep., Feb. 1983, at 7; Wriston, , Nurse Practitioner Reimbursement, 6 J. Health Pol., Pol'y & L. 444 (1981)CrossRefGoogle Scholar. When coverage is provided, how much to pay nonphysicians has been a problem for the payers, who are administratively comfortable only when they can pretend that all “coded” services are qualitatively alike. See 1 Lewin & Assocs., Report to the FTC Competition Among Health Practitioners: The Influence of the Medical Profession on the Health Manpower Market, ch. V (hereinafter cited as Lewin Report); Thompson, Non-Physician Reimbursement Practices of Third Party Payers, in American Society of Law & Medicine, Licensing and Credentialing of Health Care Providers (Conf. Proc, October 25-26, 1982). Cf. Virginia Academy of Clinical Psychologists v. Blue Shield, 624 F.2d 476 (4th Cir. 1980).

³² See generally Havighurst, supra note 27.

³³ See infra notes 35-41 and accompanying text.

³⁴ E.g., In re RMJ, 102 S. Ct. 929 (1982) (controls on lawyer advertising); Friedman v. Rogers, 440 U.S. 1 (1979) (optometry advertising, prohibition of trade names); National Soc'y of Prof. Eng'rs v. United States, 435 U.S. 679 (1978) (ban on competitive bidding by engineers); Bates v. State Bar of Ariz., 433 U.S. 350 (1977) (ban on lawyer advertising in newspapers); Semler v. Oregon State Bd. of Dental Examiners, 294 U.S. 608 (1935) (prohibition of dentist advertising); Nara v. American Dental Ass'n, 526 F. Supp. 452 (W.D. Mich., 1981) (controls on dentist advertising, discussed infra note 56); In re American Dental Ass'n, 94 F.T.C, 403 (1979) (consent order). See Benham, & Benham, , Regulation Through the Professions: A Perspective on Information Control, 18 J.L. & Econ. 421, 446 (1975)CrossRefGoogle Scholar (“There is a basic incompatibility between providing consumers with the information which is generated in the usual commercial market and the implementation of professional codes of ethics.“).

³⁵ An extensive treatment of this subject appears in findings by the administrative law judge in In re AMA, 94 F.T.C. 701, 812-65 (1978). See also Canby, & Gellhorn, , Physician Advertising: The First Amendment and the Sherman Act, 1978 Duke L.J. 543Google Scholar.

³⁶ Goldfarb v. Virginia State Bar, 421 U.S. 773 (1975).

³⁷ In re AMA, 94 F.T.C. 980 (1979), modified and enforced, AMA v. FTC, 638 F.2d 443 (2d Cir. 1980), aff'd mem. by an equally divided Court, 455 U.S. 676 (1982).

³⁸ 94 F.T.C. 1005-06; see also In re AMA, 94 F.T.C, at 819-36.

³⁹ The opinion defined prohibited solicitation as statements or claims that

AMA Clarifies Policy on Advertising by MDs, Am. Med. News, April 19, 1976, at 9.

⁴⁰ See Judicial Council, supra note 8, at ix.

⁴¹ AMA v. FTC, 638 F.2d at 451.

⁴² In re AMA, 94 F.T.C, at 1029-31. Although the administrative law judge would have required the AMA to submit any advertising guidelines to direct commission oversight, the order was subsequently modified, first by the Commission and further by the court of appeals, to permit adoption of guidelines prohibiting “representations … that respondent reasonably believes would be false or deceptive within the meaning of Section 5 of the Federal Trade Commission Act.” 638 F.2d at 452. The order also permits enforcement of “reasonable ethical guidelines … with respect to uninvited, in-person solicitation of actual or potential patients, who, because of their particular circumstances, are vulnerable to undue influence.” 94 F.T.C, at 1037-38. This is all that remains of the solicitation ban. Questions about this order are raised infra note 51.

⁴³ The FTC's paternalism and distrust of advertising has been much discussed. E.g., R. Posner, Regulation of Advertising by the FTC (1973); E. Kitch & H. Perlman, Legal Regulation of the Competitive Process 177-267 (2d ed., 1979). For reference to FTC Chairman Miller's proposed new and narrower definition of deception and the FTC's proposed relaxation of advertising substantiation requirements, see Part One, n. 197 and accompanying text.

⁴⁴ It seems probable that the 4-4 split among the justices in affirming the court of appeals without opinion, AMA v. FTC, 455 U.S. 676 (1982), was occasioned by this issue rather than by the other question in the case, which was the FTC's statutory jurisdiction over the AMA. Similarly, in an earlier case finding state regulation of lawyer advertising to be an unconstitutional restriction of commercial speech, the Court had worried greatly—dividing 5-4—that information about the price of routine legal services might mislead consumers. Bates v. State Bar of Ariz., 433 U.S. 350, 372-75, 386-88, 391-400, 484 (1977).

⁴⁵ Benham, , The Effect of Advertising on the Price of Eyeglasses, 15 J.L. & Econ. 337 (1972)CrossRefGoogle Scholar; FTC, Staff Report, Advertising Ophthalmic Goods and Services (1976). The presence of such laws and other competition-reducing regulation has been attributed to the greater political strength in particular states of professional organizations vis-a-vis commercial purveyors of eyeglasses. See Benham & Benham, supra note 34; J. Begun & R. Feldman, A Social and Economic Analysis of Professional Regulation in Optometry (1981). Similar findings have been made in studies of advertising regulation in other fields. E.g. Cady, Restricted Advertising and Competition: The Case of Retail Drugs (1976).

⁴⁶ FTC, supra note 45. Quality concerns should not be dismissed out of hand; if the consumer can evaluate price information but cannot make judgments concerning quality, less scrupulous providers might perceive opportunities to attract patients without loss of income by imperceptibly reducing quality as well as lowering price, thereby forcing others to do so as well. On the other hand, it is frequently alleged that some risk-averse consumers of medical care rely on price as an indication of quality, suggesting problems with the foregoing scenario and the conclusion that price competition in professional fields leads to suboptimal quality. In addition, in one study more information was found to influence consumers to buy higher quality consumer goods. Sproles, , et al., Informational Inputs as Influences on Efficient Consumer Decisionmaking, 12 J. Consumer Aff. 88 (1978)CrossRefGoogle Scholar, discussed in Wilde, & Schwartz, , Intervening in Markets on the Basis of Imperfect Information: A Legal and Economic Analysis, 127 U. Pa. L. Rev. 630, 675 n. 100 (1979)Google Scholar. Although this was not a health care study, it suggests that increasing the supply of information should help consumers address quality/price trade-offs more effectively even in health care, where consumer ignorance can be reduced even though it cannot be eliminated.

⁴⁷ See, e.g., Bates v. State Bar of Ariz., 433 U.S. 350 (1977); AMA v. FTC. 638 F.2d 443 (2d Cir. 1980), aff'd mem. by an equally divided Court, 455 U.S. 676 (1982). See also Part One, nn. 211-22 and accompanying text.

⁴⁸ See Part One, nn. 63-73 and accompanying text.

⁴⁹ See Nelson, Advertising as Information Once More, in Issues in Advertising: The Economics of Persuasion (D. Tureck ed. 1978); Nelson, , Advertising as Information, 82 J . Pol. Econ. 729 (1974)CrossRefGoogle Scholar.

⁵⁰ See Pauly, & Satterthwaite, , The Pricing of Primary Care Physicians’ Services: A Test of the Role of Consumer Information, 12 Bell. J. Econ. 488 (1981)CrossRefGoogle Scholar; Darby, & Karni, , Free Competition and the Optimal Amount of Fraud, 16 J.L. & Econ. 67 (1973)CrossRefGoogle Scholar. Darby and Karni discuss ways in which the market can monitor service delivery and control fraud; Pauly and Satterthwaite demonstrate, however, that consumers can make only limited use of such techniques when markets are large and information is scarce—as when a new family in an urban community seeks a primary caregiver. See also Part One, n. 66 and accompanying text.

⁵¹ Although theoretically such self-regulation could be procompetitive in overcoming a market failure, see Part One, n. 124; infra note 108, the rulings permitting the AMA and local societies to control deceptive advertising, see supra note 42, are open to question. The FTC's own demonstration of the medical profession's past hostility to competitive advertising demonstrates the great unlikelihood that the profession would in fact use self-regulation to increase consumer confidence in professional advertising and thus its effectiveness as a competitive tool available to professionals. Moreover, the relatively narrow freedom granted medical societies to define deception is broadened in practice because of the difficulty of detecting abuses and because of the “breathing space” that the Supreme Court has regarded as appropriate for self-regulators. See Silver v. New York Stock Exch., 373 U.S. 341, 360 (1962) (discussed in Part One at text accompanying nn. 160-63). Note also that the court of appeals modified the Commission's original order to permit the AMA to prohibit whatever it reasonably believes would be deceptive. 638 F.2d at 452.

⁵² See supra note 43. The FFC's proposed new definition of deception would provide a useful standard. See Part One, n. 197 and accompanying text.

⁵³ It is to be hoped that tort doctrines on defamation and disparagement will not unduly inhibit vigorous debate. See Part One, nn. 98-100 and accompanying text.

⁵⁴ See generally R. Stevens, supra note 11.

⁵⁵ See Part One, nn. 40-43 and accompanying text.

⁵⁶ For a first amendment case striking down state bar rules limiting the fields in which lawyers could claim to specialize, see In re RMJ, 102 S. Ct. 929 (1982). In an antitrust case, Nara v. American Dental Ass'n, 526 F. Supp. 452, 458 (W.D. Mich. 1981), the ADA was allowed to prohibit plaintiff from advertising himself as a specialist in an area “in which no special training or education has been prescribed.” Although the plaintiff in that case was probably engaged in deception in holding himself out in the self-styled specialty of “oramedics,” the court appeared to permit the ADA to prohibit the advertising of any specialty not ADA-approved. Such a ruling would be wrong precisely because the professional canon against such advertising forbids more than deception. Indeed, an agreement among professionals to advertise only agreed-upon specialties would appear to be a naked restraint not redeemable—as an agreement not to advertise deceptively might be—as an attempt to overcome an identifiable market failure. See supra note 51. See also Part One, n. 175.

⁵⁷ This demonstration of the darker side of the medical profession's initiative in supplying the public with useful information has a parallel in recent antitrust treatment of the profession's collective actions to contain the cost of medical care. Though applauded by many as being in the public interest, profession-sponsored cost containment efforts have been criticized by others as being nothing more than strategic retreats by a professional cartel, the minimum concessions needed to preserve the profession's integral character in the face of powerful competitive pressures. E.g., Havighurst, & Hackbarth, , Enforcing the Rules of Free Enterprise in an Imperfect Market: The Case of Individual Practice Associations, in A New Approach To The Economics of Health Care 377 (Olson, M. ed. 1981)Google Scholar; Weller, supra note 4. These observers argue that profession-sponsored cost containment programs are useful to the profession in discouraging competitive initiatives from which consumers would ultimately benefit more than they do from whatever concessions are wrung from the cartel. In Arizona v. Maricopa County Med. Soc'y, 102 S. Ct. 2466 (1982), the Supreme Court held that a powerful professional organization violated the firm (per se) antitrust rule against price-fixing when it attempted to establish maximum limits on professional fees. See infra notes 105-07 and accompanying text. Although the dissenting Justices thought that this holding was perverse and anticonsumer, removal of the profession as the arbiter of such economically important matters is probably essential if the public is soon to enjoy the full benefits of competition (through such innovations as those noted supra note 30). Unlike fixing maximum prices, specialty certification does not come within any of the established per se rules of antitrust law and will enjoy, as we have seen, some judicial deference insofar as it is providing information of use to consumers. Nevertheless, specific recognition of its anticompetitive potential should facilitate intelligent application of the rule of reason.

⁵⁸ See Part One, nn. 21-25, 46 and accompanying text.

⁵⁹ See Part One, nn. 18-19 and accompanying text.

⁶⁰ See Part One, nn. 38-43 and accompanying text.

⁶¹ On non-ABMS boards, see Part One, nn. 18-19 and accompanying text.

⁶² See Nara v. American Dental Ass'n, 526 F. Supp. 452 (W.D. Mich. 1981), discussed supra note 56.

⁶³ Other health professionals echo physicians in decrying the duplication and confusion engendered by the existence of more than one credentialing body in a given field. See, e.g., Study of Accreditation of Selected Health Education Programs (SASHEP), Commission Report (1972) (identifying duplication as a credentialing problem); Invitational Conference on Certification in Allied Health Professions, Certification in Allied Health Professions (1971) (especially the Statement of the American Society of Medical Technologists, id. at 68, decrying “competition between ASMT and the American Society of Clinical Pathologists, a physician group, in certifying laboratory personnel). The proposed development of national credentialing standards for health personnel and the establishment of the National Commission for Health Certifying Agencies (NCHCA) also reflect the desire of other health professions for uniformity and centralization. See, e.g., Public Health Service, Credentialing Health Manpower 7-11 (1977), quoted infra in text accompanying notes 139-41.

⁶⁴ Competing credentialing or accrediting bodies coexist in several occupations. For example, in the area of medical technology, the National Commission for Health Certifying Agencies (NCHCA) accredits at least three certifiers whose personnel categories overlap to some degree. The AMA's Allied Health Directory (10th ed. 1981) lists three bodies certifying nuclear medicine technologists and two that certify several types of medical laboratory personnel. One of these is the American Society of Clinical Pathologists. See Higgins v. American Soc'y of Clinical Pathologists, 51 N.J. 191, 195, 238 A.2d 665, 667 (1968). The others are without physician affiliation. There are also two competing accreditors of physical therapy education programs—one affiliated with physicians, the other independent. See discussion infra note 164 and accompanying text.

⁶⁵ See generally Dolan, , Antitrust Law and Physician Dominance of Other Health Practitioners, 4 J. Health Pol., Pol'y & L. 675 (1980)CrossRefGoogle Scholar.

⁶⁶ For discussion of physical therapy, see infra note 164 and accompanying text. On psychologists, see Virginia Academy of Clinical Psychologists v. Blue Shield, 624 F.2d 476 (4th Cir. 1980). Osteopaths and chiropractors are independent practitioners with their own credentialing systems. See infra note 80.

⁶⁷ Some consumer and marketing literature claims that consumers suffer from “information overload” as the number of items relevant to a purchasing choice is increased. One study concluded that, given a fixed interval in which to choose a brand of detergent, an increase in the total number of information bits (number of brands times information bits per label) increased decision making effectiveness up to a point but that, beyond that point, decision making effectiveness decreased—that is, fewer consumers chose the brand that best met their previously ascertained needs. Jacoby, et al., Brand Choice Behavior as a Function of Information Overload, 11 J. Mkt. Research 63 (1974)Google Scholar; Jacoby, et al., Brand Choice Behavior as a Function of Information Overload: Replication and Extension, 1 J. Consumer Research (1974)CrossRefGoogle Scholar. However, this finding (which appears, incidentally, to differ from Pauly & Satterthwaite's observation, supra note 50, that decreasing the information available per option decreases consumers’ ability to affect the price of physician services) has been criticized. See Wilde & Schwartz, supra note 46 at 630, 675-76 & n.100 (1979), and sources cited therein. For one thing, the time constraint is unrealistic because consumers given more information to evaluate would anticipate a greater payoff from investing more time. In addition, the research ignores the influence of a few informed, searching consumers in policing the market, inducing producers to offer better value to all. Id. at 638, 649-50; Pauly, , Is Medical Care Different?, in FTC, Competition in the Health Care Sector: Past, Present, and Future 19, 24 (1978)Google Scholar. Finally, even if providing more information “bits” risks overloading the consumer, credentialing and accrediting would seem exempt from this criticism precisely because they serve the valuable purpose of summarizing and interpreting a great deal of raw information, giving the consumer only the “bottom line” conclusion. Although competing credentialers or accreditors would themselves have to be evaluated by consumers, they nevertheless provide an efficient response to the consumer's problem of getting and handling information.

⁶⁸ See discussion of the FTC's potential for controlling deceptive credentialing in Part One, text accompanying nn. 180-97.

⁶⁹ A bona fide credentialing body depends on its reputation and would be unlikely to jeopardize it by engaging in deception for the short-term advantage of its sponsors. Some individual, professional advertisers—e.g., cosmetic plastic surgeons; who have little repeat business and rely on self-referrals—might be less concerned about building long-standing goodwill.

⁷⁰ In the leading case of United States v. Aluminum Co. of America, 148 F.2d 416, 430 (2d Cir. 1945), the court observed that monopoly might be attributable to “superior skill, foresight and industry” and that “[t]he successful competitor, having been urged to compete, must not be turned upon if he wins.” Although the holding in Alcoa may not have been entirely true to this dictum, recent cases have been more respectful of success. See Part One, n. 209.

⁷¹ To the extent that information is a public good that can be used by everyone once it is produced and published, it makes no sense to have two sources producing the same information. On the other hand, different entities might be interested in different things and thus not duplicate each other. Thus, natural monopoly situations would exist only where the information that consumers seek is simple and straightforward or where there is a near-universal preference for certain information. See infra text accompanying note 74.

⁷² One can imagine pursuing a credentialing monopoly under section 2 of the Sherman Act, 15 U.S.C. § 2 (1981). Although this Article develops a number of legal theories under section 1, it stops short of discussing section 2 issues in detail. Subsequent discussion of relevant markets in which to examine the effects of mergers and joint ventures would be relevant to section 2 theories, see infra notes 144-46, 161-62 and accompanying text, but little attention has been given to identifying exclusionary practices (such as market-division agreements) that might warrant the invocation of section 2. It is not intended that the possibility of section 2 actions be ruled out, however.

⁷³ It is important to observe that competition in credentialing can be beneficial even if it takes only the form of potential competition. See infra text accompanying note 157. This observation underscores how essential it is that entry into the business of supplying consumer information not be artificially restricted.

⁷⁴ See supra note 71. The situation here is essentially different from that prevailing where two athletic leagues offer competing exhibitions of skill in the same sport; such competition has always proved unstable, gravitating toward merger of the leagues, because of the public's demand for a single champion and a definitive ranking of teams. Cf. J. Weistart & C. Lowell, The Law of Sports 724-31 (1979). If a definitive ranking were the object in personnel credentialing, a single certifying body could satisfy the information need. But the desire for a definitive minimum standard usually originates with the industry itself rather than with the consumer. For a striking example, see infra note 156. Whereas the industry is interested only in eliminating low-cost competitors without drawing any other distinctions, the consumer interest lies in having reliable information about as many differences as possible.

Although some users of information yearn to be told definitively who is qualified to perform particular tasks, see Part One, text accompanying nn. 74-81; supra notes 27-32 and accompanying text, their desire to be relieved of the responsibility for making choices need not be respected at the expense of allowing natural diversity in the marketplace to be suppressed.

⁷⁵ See Public Citizen Health Research Group v. Committee on Med. Discipline, 573 F.2d 863, 865 n.2 (4th Cir. 1978), where the court stated:

The issue of professional accountability was thus sharply drawn.

⁷⁶ For a thoughtful and well-referenced discussion of ideology in medical care, see Kissam, , Government Policy Toward Medical Accreditation and Certification: The Antitrust Laws and Other Procompetitive Strategies, 1983 Wis. L. Rev. 1, 5-6, 21-27Google Scholar. Addressing the subject in terms of the sociology of knowledge, Kissam draws an interesting parallel between the ways in which ideology influences medical practice and the influence of intellectual “paradigms” in the history of science, as observed by Thomas Kuhn. T. Kuhn, The Structure of Scientific Revolutions viii, 10, 175 (2d ed. 1970). Though soundly-based paradigms are valuable in focusing energies in the pursuit of scientific progress, they may also stultify progress by impairing the receptivity of a scientific establishment to new challenges and new ideas. Physicians, even though they are not research scientists, tend to share a common view of their discipline as a result of their medical training and the continuing influence of professional institutions. Their commonly-held views, or paradigms, have undoubtedly inspired medical research and the development and dissemination of much useful knowledge, but, in conjunction with the operative economic incentives, they have also discouraged interest in evaluating the cost-effectiveness and other implications of new therapies and technologies and in developing and adopting cost-reducing measures.

⁷⁷ In an early article, economist Kenneth Arrow offered a justification for the medical profession's assumption of the power to define ethical behavior and even expressed admiration for the profession's efforts as a successful societal solution to the problem of consumer ignorance. Arrow, Uncertainty and the Welfare Economics of Medical Care, 53 Am. Econ. Rev. 941 (1963)Google Scholar. Sociologist Paul Starr has recently rendered a useful critique of Arrow's thesis, observing that it was not society but the medical profession itself that defined the problem and designed the solution. P. Starr, supra note 4, at 225-27. In view of the numerous other available techniques for coping with consumer ignorance, see Part One, nn. 63-73 and accompanying text, one should not be uncomfortable with rejecting Arrow's analysis and the profession's self-serving approach.

⁷⁸ For evidence of the lack of scientific basis for many clinical decisions, see, e.g., Office of Technology Assessment, The Implications of Cost-Effectiveness Analysis of Medical Technology (1980); J. Bunker, et al., Costs, Risks, and Benefits of Surgery (1977); Eddy, , Clinical Policies and the Quality of Clinical Practice, 307 New Eng. J. Med. 343 (1982)CrossRefGoogle Scholar. The case for fostering decentralized decision making on technical issues in medicine is developed in Havighurst, supra note 2.

⁷⁹ 719 F.2d 207, 213 (7th Cir. 1983). The court's willingness to let a jury find a noncommercial purpose despite the medical profession's conflict of interests would seem to ignore the tendency in human nature and of organized interest groups to espouse principles consonant with self-interest. See Part One, nn. 123-26 and accompanying text. In suggesting that the boycott of chiropractors might be justified, the opinion of the court of appeals departs sharply from the general rule that compatibility with competition is the controlling question in a restraint-of-trade case and that restraints, including boycotts, cannot be upheld on public interst grounds. See infra notes 100-10 and accompanying text; Part One, text accompanying nn. 137-53. The court sought, however, to distinguish between a boycott for a “public-interest motive,” which would be unlawful as an attempt to reverse by private action the legislature's recognition of chiropractic, and a boycott expressing a “patient care motive” embodying the medical profession's commitment to science. Not only is this distinction exceedingly fine, but it is hard to agree that it should save the boycott in the Wilk case, which among other things systematically denied to the patients of chiropractors the benefits of the very scientific medicine that the physicians touted so highly.

More fundamentally, judicial tolerance for professional ethics embodying agreements not to compete in particular ways can result only from a determination that, in antitrust contemplation, the organized profession is a legitimate decision making entity that is entitled, like a sports league or trademark owner, to control by coercive measures (that is, by reasonable ancillary restraints) the quality, integrity, and uniformity of its products. Cf. Molinas v. National Basketball Ass'n, 190 F. Supp. 241 (S.D.N.Y. 1961); Smith v. Pro Football, 593 F.2d 1173 (D.C. Cir. 1978); Tripoli Co. v. Wella Co., 425 F.2d 932 (3d Cir. 1969), cert, denied 400 U.S. 831 (1970). Yet, organizations of competing professionals that offer no different product and do not integrate services make a weak claim of being procompetitive, efficiency-enhancing joint ventures. See Arizona v. Maricopa’ County Med. Soc'y, 102 S. Ct. 2466 (1982). Even if a professional organization were thought helpful in overcoming market failure (e.g., the adverse consequences of consumer ignorance), the possession of undue market power by that organization, when organization on a smaller scale (e.g., through such vehicles as HMOs) was feasible, should settle the matter. See infra notes 100-10 and accompanying text. If it is desirable that antitrust law retain coherence, see infra text accompanying notes 100-03, the Wilk opinion's tolerance for professional boycotts must be wrong.

⁸⁰ On the struggle between osteopathic and allopathic physicians, see generally Blackstone, , Competition Within the Physicians’ Services Industry: Osteopaths and Allopaths, 8 Am. J.L. & Med. 137 (1982)Google Scholar; The AMA and the Osteopaths: A Study of the Power of Organized Medicine, 22 Antitrust Bull. 405 (1977)Google Scholar. The gradual diminution of differences between the professions and some AMA efforts to absorb osteopathy have resulted in virtual merger in some areas, particularly as regards licensure. See discussion infra note 147 and accompanying text. However, in most state licensure schemes the distinction is preserved. See Maceluch v. Wysong, 680 F.2d 1062 (5th Cir. 1982); Eatough v. Albano, 673 F.2d 671 (3d Cir. 1982); Procario v. Ambach, 561 F. Supp. 804 (N.D.N.Y. 1983); Arizona Bd. of Osteopathic Examiners v. Ferris, 20 Ariz. App. 535, 514 P.2d 288 (1973).

On chiropractors, see, e.g., Wilk v. AMA, 719 F.2d 207 (7th Cir. 1983) (discussed supra note 79 and accompanying text); Ballard v. Blue Shield of W. Va., 543 F.2d 1075 (4th Cir. 1976); In re Application of Consumers Union, 495 F. Supp. 582 (S.D.N.Y. 1980); Health Care Equalization Comm. v. Iowa Med. Soc'y, 501 F. Supp. 970 (S.D. Iowa 1980); Brodie v. State Bd. of Med. Examiners, 177 N.J. Super. 523, 427 A.2d 104, cert, denied, 87 N.J. 386, 434 A.2d 1068 (1981). See also E. Rayack, Professional Power and American Medicine: The Economics of the American Medical Association 253-58 (1967); Kirchner, Will These M.D.s Win a Counterattack on Chiropractors?, Med. Econ., July 19, 1982, at 92; Mettera, Chiropractors and M.D.s: The Referral Doors Inch Wider, Med. Econ., July 6, 1981, at 157; Allen, Medicine vs. Chiropractic: Our Leaders Let All of Us Down, Med. Econ., Sept. 17, 1979, at 133.

⁸¹ On the range of choice in obstetric care generally, see, e.g., S. Arms, Immaculate Deception (1975); Kramer, Revolution in the Delivery Room, N.Y. Times Magazine, July 11, 1976, at 18. For an interesting study of the issues raised by one competing maternity model—nurse-midwifery care in freestanding obstetrical centers—see The Childbearing Center Case Study, in 2 Lewin Report, supra note 31.

⁸² Acupuncture, naturopathy, and lay midwifery are among the numerous nontraditional therapies that have gained adherents. See generally Forster, How Much of Your Turf Do the Non-M.D. Doctors Have?, Med. Econ., Sept. 27, 1982 at 167; Carlova, Will Low-Cost “Healers” Replace M.D.S?, Med. Econ., Aug. 9, 1982, at 84; Dolan, , The Law and the Maverick Health Practitioner, 26 St. Louis U.L.J. 627 (1981)Google Scholar; Note, Restrictions on Unorthodox Health Treatment in California: A Legal and Economic Analysis, 24 U.C.L.A. L. Rev. 647 (1977)Google Scholar.

⁸³ See supra note 19.

⁸⁴ A particularly instructive professional tactic was the early ethical injunction against physician criticism of other physicians and of the profession as a whole. Rationales for suppressing private awareness of and public debate about professional issues included the need to maintain professional solidarity and the public's trust in the profession as an entity. See J. Berlant, supra note 4, at 72-73, 75-79.

⁸⁵ Market reformers tended to stress the value of HMOs as competitors of the dominant system because prepaid group practice had a track record that could easily be appreciated. See, e.g., A. Enthoven, Health Plan (1980); FTC, Staff Report on the Health Maintenance Organization and Its Effects on Competition (1977); P. Ellwood, et al., The Health Maintenance Strategy (1970); McClure, , On Broadening the Definition of and Removing Regulatory Barriers to a Competitive Health Care System, 3 J. Health Pol., Pol'y & L. 303 (1978)CrossRefGoogle Scholar; Havighurst, , Health Maintenance Organizations and the Market for Health Services, 35 Law & Contemp. Probs. 716 (1970)CrossRefGoogle Scholar. The emphasis on “alternative delivery systems,” however, appeared to confirm the monolithic character of the traditional system and resulted in undue neglect of the potential for change within that system. See C. Havighurst, Deregulating the Health Care Industry 111-17(1982); Havighurst, & Hackbarth, ,Private Cost Containment, 300 New Eng. J. Med. 1298 (1979)CrossRefGoogle Scholar. Current developments in the private sector, see, e.g., supra note 30, can be seen as filling in the spectrum between group practice on the one hand and traditional health insurance on the other.

⁸⁶ See supra note 80. For reservations about the implicit conception of medicine as a single school or entity, see supra notes 78-79.

⁸⁷ See Olson, supra note 8; Havighurst, supra note 27.

⁸⁸ E.g., AMA v. United States, 130 F.2d 233 (D.C. Cir. 1942), aff'd, 317 U.S. 519 (1943).

⁸⁹ E.g., the ethical prohibition of “contract practice” by physicians that was condemned by the FTC, along with advertising restrictions, in the 1979 AMA case. 94 F.T.C, at 1011-18.

⁹⁰ The medical profession's historic dislike for group practice can be explained under the theory espoused by Pauly & Satterthwaite, supra note 50, that competition among a large number of solo practitioners is ineffective because of the difficulty of getting comparative information. The ability of a group practice to build and exploit a reputation thus makes it a vehicle for intensifying competition. On legislation restricting professionals’ use of trade names, see Friedman v. Rogers, 440 U.S. 1 (1978).

⁹¹ See generally FTC, supra note 21; FTC, Physician Agreements to Control Medical Prepayment Plans, 46 Fed. Reg. 48,982 (1981).

⁹² See, e.g., In re Michigan State Med. Soc'y, [1979-83 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 21,991 (Feb. 17, 1983) (final order to cease and desist). On professional boycotts generally, see Havighurst, supra note 27, at 344-62.

⁹³ See, e.g., Goldberg, & Greenberg, , The Effect of Physician Controlled Health Insurance: U.S. v. Oregon State Medical Society, 2 J. Health Pol., Pol'y & L. 48 (1977)CrossRefGoogle Scholar.

⁹⁴ In re Indiana Fed. of Dentists, [1979-83 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 21,992 (Feb. 17, 1983) (final order to cease and desist). See also In re Texas Dental Ass'n, [1979-83 Transfer Binder] Trade Reg. Rep. (CCH) ¶ 21,927 (Nov. 19,1982) (consent order to cease and desist).

⁹⁵ See, e.g., Arizona v. Maricopa County Med. Soc'y, 102 S. Ct. 2466 (1982) (maximum fee setting by powerful professional organizations condemned); Union Labor Life Ins. Co. v. Pireno, 102 S. Ct. 3002 (1982) (professional society's peer review committee to review charges for insurers not exempt under McCarran-Ferguson Act); Peer Review Plan for Resolving Fee-Related Disputes, 99 F.T.C. 648 (1982) (advisory opinion).

⁹⁶ See, e.g., Watson, , Disclosure of Computerized Health Care Information: Provider Privacy Rights Under Supply Side Competition, 7 Am. J.L. & Med. 265 (1981)Google Scholar; Part One, cases cited n. 65. See also Judicial Council, supra note 8, at 16-18 (ethical principles governing confidentiality of computerized medical records).

⁹⁷ See generally J. Feder, Medicare: The Politics of Federal Hospital Insurance (1977) (reviewing the design of the Medicare program); Havighurst, supra note 27, at 336-43 (reviewing professional influence over private insurance plans).

⁹⁸ On the treatment of cost issues as professional questions, see Havighurst & Blumstein, supra note 19; Havighurst, supra note 2. See also supra note 57.

⁹⁹ See generally Market Reforms in Health Care, supra note 2. On antitrust developments, see Havighurst, The Contributions of Antitrust Law to a Procompetitive Health Care Policy, in id. at 295.

¹⁰⁰ See, e.g., Wilk v. AMA, 719 F.2d 207 (7th Cir. 1983); Arizona v. Maricopa County Med. Soc'y, 643 F.2d 553 (9th Cir. 1980), rev'd, 102 S. Ct. 2466 (1982); Hospital Bldg. Co. v. Trustees of Rex Hosp., 691 F.2d 678 (4th Cir. 1982), cert, denied, 52 U.S.L.W. 3280 (U.S. Oct. 11, 1983); Norris, & Szabo, , Communication Between the Antitrust and the Health Law Bars: Appeals for More Effective Dialogue and a New Rule of Reason, 7 Am. J.L. & Med. i (1981)Google Scholar; Pfizenmayer, , Antitrust Law and Collective Physician Negotiations with Third Parties: The Relative Value Guide Object Lesson, 7 J. Health Pol., Pol'y & L. 128 (1982)CrossRefGoogle Scholar. On the Rex case, see Havighurst, Health Planning and Antitrust Law: The Implied Amendment Doctrine of the Rex Hospital Case, N.C. Cent. L.J. (in press).

¹⁰¹ United States v. Addyston Pipe and Steel Co., 85 F. 271, 283-84 (6th Cir. 1898), aff'd, 175 U.S. 211 (1899).

¹⁰² Arizona v. Maricopa County Med. Soc'y, 102 S. Ct. 2466, 2476 (1982).

¹⁰³ National Soc'y of Prof. Eng'rs v. United States, 435 U.S. 679, 695-96 (1978). But see infra note 108; Wilk v. AMA, 719 F.2d 207 (7th Cir. 1983) (criticized supra note 79 and accompanying text).

¹⁰⁴ 435 U.S. at 696. Defendants were not permitted to offer proof to the effect that by discouraging cut-rate engineering work dangerous to public health and safety their ethical prohibition of competitive bidding benefitted consumers more than price competition.

¹⁰⁵ 102 S. Ct. 2466 (1982).

¹⁰⁶ Id. at 2477. The decision can be criticized for not making the power of the organization an explicit element of the offense found, since arrangements that are arguably efficient should not be foreclosed unless the percentage of competitors involved is dangerously and unnecessarily large or so large as to alter the probability of net procompetitive effects. See infra note 109. The Court also relied unnecessarily on three highly troublesome prior decisions: United States v. Topco Assocs., 405 U.S. 596 (1972) (joint venture of modest size held guilty of the per se offense of market division despite a high probability of efficiency); Albrecht v. Herald Co., 390 U.S. 145 (1968) (vertical imposition of maximum resale price equated with fixing minimum price despite clear benefit to consumers); Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U.S. 211 (1951) (similar). See Gerhart, , The Supreme Court and Antitrust Analysis: The (Near) Triumph of the Chicago School, 1982 Sup. Ct. Rev. 319Google Scholar. Despite these questionable features of the opinion, the Maricopa result is defensible on the ground that the defendant physician organizations possessed substantial market power, were likely to preclude or inhibit competitive innovation, and offered no obvious efficiencies not obtainable by organizing on a lesser scale. See supra note 57. Cf. Havighurst & Hackbarth, supra note 57.

¹⁰⁷ 102 S. Ct. at 2477-78. The Court referred specifically to the contractual agreements between insurers and providers that were at issue in Group Life & Health Ins. Co. v. Royal Drug Co., 440 U.S. 205 (1979). See supra note 30.

¹⁰⁸ Existing doctrine may leave room for a very narrow “worthy purpose” defense based on a claim that, although an agreement eliminates some competition, it overcomes a market failure and thus leads to results closer to those that would be yielded if the market functioned smoothly. See Part One, n. 124; supra note 51. See also P. Areeda, The “Rule of Reason” in Antitrust Analysis: General Issues 5-8 (1981). Although the defense explicitly rejected in National Soc'y of Prof. Eng'rs v. United States, 435 U.S. 679 (1978), see supra note 104, took essentially this form, the restraint in that case was very broad and affected price rather that non-price competition; moreover, the Court found the market-failure claim inplausible because most buyers were not unsophisticated. In contrast to the engineers’ “frontal assault on the basic policy of Sherman Act,” id. at 695, the narrow market-failure defense suggested here may have the merit that, while respecting the competitive paradigm, it averts the charge of mindlessness that, in view of the undeniable imperfections in real-world markets, could be leveled against the absolutist view which holds that the law requires competition for better or for worse. In any event, it would seem that a theory which permitted occasional balancing of potential benefits and harms in light of a strong presumption favoring competition would seldom result in approval of a naked restraint. Thus, while Areeda suggests one hypothetical restraint that might be approved, Areeda, supra, at 4, 7-8, he also presents others that, while arguable, would seem not to warrant an exception. P. Areeda, Antitrust Analysis ¶¶ 346, 348-49,, 351, 380 (3d ed. 1981). None of the restraints examined in the remainder of this Article would seem defensible under a market-failure theory. But see supra note 51.

¹⁰⁹ See generally Landes, & Posner, , Market Power in Antitrust Cases, 94 Harv. L. Rev. 937 (1981)CrossRefGoogle Scholar. The authors note “a growing authority for requiring proof of substantial market power in a § I Rule of Reason case.” Id. at 956 n.35. In a joint venture case under section 1, power should be a factor in deciding whether particular conduct, not amounting to a naked restraint condemnable under a per se rule, should be subject to additional scrutiny and possibly to a requirement that the purpose being pursued, while legitimate, must be achieved by a less restrictive alternative means—such as by organizing on a smaller scale. See supra note 106.

¹¹⁰ For one attempt to state a rule of thumb distinguishing joint ventures with excessive power from those that are deemed procompetitive on balance, see FTC,supra note 91,46 Fed. Reg. at 48,988-912.

¹¹¹ Although it is not customary to define a “relevant market” in section 1 cases, mistakes can occur when the affected market is not carefully identified. E.g., Chicago Bd. of Trade v. United States, 246 U.S. 231 (1918) (focusing on market for grain or “to-arrive” grain, when the market actually restrained was for middleman services in the buying and selling of grain); Standard Oil Co. (Indiana) v. United States, 283 U.S. 163 (1931) (focusing on market for gasoline or “cracked” gasoline, when the market actually restrained was for patented cracking technology). On defining the relevant market in a merger context, see infra notes 144-45 and accompanying text; see also infra notes 159-62 and accompanying text.

¹¹² In a report criticized in Part One, text accompanying nn. 154-59, the FTC staff took the dubious position that, because competitor-sponsored standards influence consumer choices, they “restrain trade” and are unlawful if a “less restrictive alternative” (i.e., a better standard) is available. FTC, Staff Report, Standards and Certification 244-61 (1983) [hereinafter cited as FTC Staff Report]. This analysis of joint ventures to produce commercial information is faulty because it fails to recognize that such information, though produced solely because of its value in other markets, is independent of the goods and services whose purchase it informs and thus constitutes a separate product market. The procompetitive virtues of such joint ventures can be more satisfactorily assessed in their own market than in the market in which they affect demand. Indeed, the FTC staff's approach to the collective production of information implies that a joint venture to produce, for example, a mainframe computer should be scrutinized primarily for effects, not in the computer market, but in the complementary market for peripheral equipment. Although such effects are relevant, see infra note 114, exclusive focus on them invites close assessment of the quality of the particular information generated (the approach criticized in Part One) and loses sight altogether of anticompetitive effects in the information market.

¹¹³ Under this view, voluntary nonprofit associations, both competitor-controlled and independent, that deal only in information are engaged in trade. In American Soc'y of Mech. Eng'rs v. Hydrolevel Corp., 102 S. Ct. 1935, 1947 (1982), the Supreme Court refused to exempt petitioner ASME from vicarious antitrust liability because “[a]lthough ASME may not operate for profit, it does derive benefits from its codes, including the fees the Society receives for its code-related publications and services, the prestige the codes bring to the Society, the influence they permit ASME to wield, and the aid the standards provide the profession ….” Similarly, in Roofire Alarm Co. v. Underwriters Labs., 188 F. Supp. 753, 754 (E.D. Tenn. 1959), aff'd, 284 F.2d 360 (6th Cir. 1960), defendant Underwriters Laboratories (UL) was described as “a business league formed to perform services ordinarily conducted for profit. It is clearly not established for public welfare, but for private gain… to benefit qualifying manufacturers and insurance companies … through reduced fire losses.” This common-law case was followed by an antitrust case finding UL's failure to certify plaintiff's fire alarm reasonable under the Sherman Act. Roofire Alarm Co. v. Royal Indem. Co. 202 F. Supp. 166 (E.D. Tenn. 1962), aff'd, 313 F.2d 635 (6th Cir.), cert, denied, 373 U.S. 949 (1963). Although the Sherman Act would appear to apply to nonprofit certifiers and accreditors, the FTC would probably lack jurisdiction over any that were not competitor-controlled. See Part One, nn. 184-85 and accompanying text.

¹¹⁴ Even if the production of commercially valuable information does not itself constitute trade or commerce, collective action restraining it may be unlawful if the market for services is adversely affected. Cf. McLain v. Real Estate Bd. of New Orleans, 444 U.S. 232, 241 (1980) (stating that the Sherman Act, like the Commerce Clause, “has … long been interpreted to extend beyond activities actually in interstate commerce to reach other activities that, while wholly local in nature, nevertheless substantially affect interstate commerce”); AMA v. United States, 317 U.S. 519, 528 (1942) (declining to reach the issue of whether a physician's practice constitutes “trade” under the Sherman Act, since “the calling or occupation of the individual physicians charged as defendants is immaterial if the purpose and effect of their conspiracy” was to impose restraints proscribed by the antitrust laws).

¹¹⁵ This effect is concisely spelled out in P. Feldstein, supra note 11, at 324-25 (footnote omitted):

¹¹⁶ In Ronwin v. State Bar of Ariz., 686 F.2d 692 (9th Cir. 1982), cert, granted, 51 U.S.L.W. 3825 (U.S. May 16, 1983) (No. 82-1474), plaintiff claimed that the state bar controlled the number of new entrants by manipulating the pass rate on the state licensure examination. Comparable manipulation of pass rates on certification exams would be a less effective strategy because persons failing the exam would not be legally barred from competing and, having had the same training as certificate holders, could do so quite effectively. Specialty certifiers will therefore prefer to lengthen training, since that strategy discourages potential entrants from embarking on training in the first place and produces fewer uncertified competitors. In fact, the passing rate on most specialty certification examinations is fairly constant from year to year.

¹¹⁷ Kissam would presumably so argue. See Kissam, , Applying Antitrust Law to Medical Credentialing, 7 Am. J.L. & Med. 1, 17-19 (1981)Google Scholar; Kissam, supra note 76 at 11, 46-48 (arguing generally that credentialing and accrediting standards are expressions of professional opinion deserving significant protection from antitrust enforcement).

¹¹⁸ Certification and recertification requirements need not be identical, of course. Because those engaged in clinical practice may not keep current in the entire field but achieve unusual expertise in their area of actual practice, recertification might depend upon a showing of specific rather than general competence. Also, the availability of outcome data suggests that clinical skills can be evaluated directly rather than solely by examination. See discussion infra notes 151-52.

¹¹⁹ Currently available literature indicates that only the most exemplary candidates seek voluntary recertification, and, of those who do, the youngest and most academically-oriented perform best on recertification examinations, See, e.g., Cruft, , et al., Recertification in Surgery 1980, 116 Arch. Surg. 1093 (1981)CrossRefGoogle ScholarPubMed; Meskauskas, & Webster, , The American Board of Internal Medicine Recertification Examination: Process and Results, 82 Ann. Intern. Med. 577 (1975)CrossRefGoogle Scholar. This evidence strongly suggests that those certified under less rigorous standards do not necessarily keep up with the state of the art.

¹²⁰ Under a vintaging system, “certified since 1963” would be a misleading claim unless it meant that initial certification was followed by periodic recertification up to the present; for a single certification only, “certified in 1963” would be the acceptable designation.

The ABMS now permits specialty boards to adopt a kind of vintaging policy. The listing of specialists in its Directory of Medical Specialties will include the date of original certification and the dates of any recertificatons, “[a]t the request of the Member Board and unless permission is denied by the diplomate.” ABMS, Annual Report and Reference Handbook—1982 54.

¹²¹ In common-law cases involving challenges to grandfather clauses as unfair to new applicants, the clauses have been found permissible under minimal scrutiny. See Kreuzer v. American Academy of Periodontology, 558 F. Supp. 683, 685 (D.D.C. 1983); Dietz v. American Dental Ass'n, 479 F. Supp. 554,560-61 (E.D. Mich. 1979). See also Pinsker v. Pacific Coast Soc'y of Orthodontists, 12 Cai. 3d 541, 560, 526 P.2d 253, 267, 116 Cal. Rptr. 245, 259 (1974), where a dentist who could have joined an orthodontic society pursuant to a grandfather clause but had not was found currently unqualified to perform services limited to members because of the validity of the grandfather clause and because “defendants could properly conclude that through participation in the association's numerous activities, society members have been exposed to new professional developments not generally available to nonmembers.” These cases rely on Watson v, Maryland, 218 U.S. 173 (1910), which upheld a grandfather clause ina statutory physician licensure scheme against an equal protection challenge, holding that the state in its exercise of the police power might reasonably conclude that persons already in practice possessed skills equivalent to those which others were required to demonstrate. Although such a finding would be consistent with the minimal scrutiny of standards on fairness grounds that was advocated in Part One, the effect of a grandfather clause on competition is a distinct issue. See supra text accompanying note 117.

¹²² See Part One, n. 128.

¹²³ See supra note 115.

¹²⁴ As the costs of mandated education rise, individual physicians might get off the certification track and enter specialized practice with less than the prescribed amount of training. Competing group practices or HMOs might undertake to provide unaccredited training as a way of providing specialized services at lower cost. It thus appears that the strategy of raising standards may not be pressed beyond a certain point and may become less effective as the system becomes more cost conscious and less monolithic, offering opportunities to competent but uncertified specialists who are willing to work for less than their more expensively trained competitors.

¹²⁵ A recent official AMA statement expressly recognizes that the purpose of certification extends beyond providing information useful to consumers and includes also “the intent of each specialty board to raise its standards continually, as applied to b o th the education and assessment of candidates, so that the quality of medical practice will continue to rise steadily.” AMA,82nd AnnualReport on Medical Education in the United States 1981-82, 248 J. A.M.A. 3225, 3233 (1982)Google Scholar. See P. Feldstein, supra note 11.

¹²⁶ See supra notes 24-32 and accompanying text.

¹²⁷ FTC Staff Report, supra note 112, at 242-79; Curran, , Industrial Standards, Antitrust, and the Logic of Public Action: An Historical Search for a Rational Policy, 17 Duq. L. Rev. 717 (1979)Google Scholar.

¹²⁸ See Part One, text accompanying nn. 141-50.

¹²⁹ In National Macaroni Mfrs. Ass'n v. FTC, 65 F.T.C. 583 (1964), aff'd 345 F.2d 421 (7th Cir. 1965), defendants had agreed to reduce the proportion of durum wheat in macaroni in order to depress the price of that component in a time of short supply. The Commission prohibited using standardization “for the purpose of fixing or manipulating the price of such ingredients.” 65 F.T.C, at 612. Agreements to standardize products might also be condemned in a particular case as a technique for facilitating oligopolistic conduct. See supra note 26. But because the benefits of standardization can be achieved by means less restrictive than industrywide agreements not to produce nonstandard products, such naked agreements not to compete should be unlawful without proof of their purpose or effect. The FTC's statement in the Macaroni case that “[w]e do not hold that all efforts at product standardization … are unlawful,” 65 F.T.C, at 612, should not be read as recognizing no legal difference between specifying standards and affirmatively agreeing to produce only standard items.

¹³⁰ Conspiracies among educational institutions to limit students’ range of choice are not unprecedented. It has been alleged, with apparent good cause, that, in the early part of the century, leading American law schools used accreditation to justify (and coordinate) an increase in their respective courses of study from two to three years. See First, Competition in the Legal Education Industry (II): An Antitrust Analysis, 54 N.Y.U. L. Rev. 1049, 1077-78 (1979)Google Scholar (hereinafter cited as First II); First, Competition in the Legal Education Industry (I), 53 N.Y.U. L. Rev. 311, 336-38 (1978)Google Scholar (hereinafter cited as First I). A similar agreement today should not be excused simply because an accreditation program provided the vehicle for agreement and enforcement.

¹³¹ See, e.g., Theatre Enters, v. Paramount Film Dist. Corp., 346 U.S. 537 (1954); Interstate Circuit, Inc. v. United States, 306 U.S. 208 (1939). See also Posner, , Oligopoly and the Antitrust Laws: A Suggested Approach, 21 Stan. L. Rev. 1562 (1969)CrossRefGoogle Scholar; Turner, , The Definition of Agreement under the Sherman Act: Conscious Parallelism and Refusal to Deal, 75 Harv. L. Rev. 655 (1962)CrossRefGoogle Scholar.

¹³² Conscious parallelism may result from oligopolistic interdependence rather than from explicit collusion, but may still be unlawful. Interstate Circuit Inc. v. United States, 306 U.S. at 222. The key to inferring an actual or tacit conspiracy is generally recognized to be a finding that the parallel actions would be contrary to the self interest of each individual actor unless all of them acted in the same fashion. See Bogosian v. Gulf Oil Corp., 561 F.2d 434 (3d Cir. 1977), cert. denied, 434 U.S. 1086 (1978); Ambook Enters, v. Time, Inc., 612 F.2d 604 (2d Cir. 1979), cert. dismissed, 448 U.S. 914 (1980).

¹³³ See Copa, The Balance Wheel for Accreditation (1981). Admittedly, it is sometimes difficult to segregate a single program from the institution as a whole; this factor could justify the adoption of the institutional focus in a particular case. Nonetheless, both forms of accreditation are often possible. Both are employed in nursing. See Part One, n. 54 and accompanying text. In one instance a regional institutional accreditor accredited a California law school that the American Bar Association would not approve. See First, Competition (II), supra note 130, at 1082-84.

¹³⁴ United States v. Topco Assocs., 405 U.S. 596 (1972); Timken Roller Bearing Co. v. United States, 341 U.S. 593 (1951). See also Continental T.V., Inc. v. GTE Sylvania, Inc., 433 U.S. 36 (1977) (vertical restrictions on retailers’ locations held not subject to per se rule applicable to horizontal market division).

¹³⁵ Only seven boards mention, in their information to candidates for certification, what could be construed as a practice limitation. Three—the American Boards of Urology, Colon and Rectal Surgery, and Orthopaedic Surgery—require candidates to limit their practice to the specialty. The others—Surgery, Nuclear Medicine, Pathology, and Plastic Surgery— require assurances only to the effect that the candidate be actively or principally engaged in the specialty. See Kreuzer v. American Academy of Periodontology, 558 F. Supp. 683 (D.D.C. 1983), upholding a full-time practice requirement as a condition of membership in a dental specialty society. Discussion of this case in Part One, n. 175, suggests that the ADA's ethical limitations on practice patterns not fitting its defined specialties might be subject to antitrust attack. Cf. Nara v. American Dental Ass'n, 526 F. Supp. 452 (W.D. Mich. 1981) (discussed supra note 56).

¹³⁶ See National Soc'y of Prof. Eng'rs v. United States, 435 U.S. 679 (1978); Northern Pacific Ry. Co. v. United States, 356 U.S. 1 (1958). On the extension of the p e r se rule against price fixing in the Maricopa County case, see supra text accompanying notes 105-07.

¹³⁷ See supra note 111-14 and accompanying text.

¹³⁸ See supra note 114.

¹³⁹ Public Health Service, Credentialing Health Manpower 7 (1977).

¹⁴⁰ Id. at 9.

¹⁴¹ Id. at 11.

¹⁴² Section 7 of the Clayton Act, 15 U.S.C. § 18 (1981), applies to stock and asset acquisitions by any “person subject to the jurisdiction of the [FTC].” Mergers of credentialing and accrediting bodies involve no stock and could probably be structured to involve no assets. On the FTC's jurisdiction over credentialing and accrediting bodies, see Part One, nn. 184-85 and accompanying text.

¹⁴³ On the economic benefits of industrial mergers, see P. Areeda & D. Turner, IV Antitrust Law: An Analysis of Antitrust Principles and their Application 146-200 (1980); P. Areeda, Antitrust Analysis: Problems, Text, Cases 862-71 (3rd ed. 1981).

¹⁴⁴ Mergers are now customarily evaluated under statistical tests set forth in revised guidelines issued by the Justice Department in 1982. U.S. Dep't of Justice, Merger Guidelines, 47 Fed. Reg. 38,493 (June 30,1982). See Symposium, 71 Calif. L. Rev. 281 (1983). See also FTC, Statement Concerning Horizontal Mergers (June 14, 1982), reprinted in Trade Reg. Rep. (CCH) No. 546, at 71 (June 16, 1982) (special supplement to 2 Trade Reg. Rep. (CCH) 4225 (Aug. 9, 1982)).

¹⁴⁵ But see infra note 152. Another merger arguably involving a smaller market share created the Council on Postsecondary Accreditation (COPA), which accredits educational accreditors. COPA was formed in 1975 by merger of the Federation of Regional Accrediting Commissions of Higher Education and the National Commission on Accrediting. By thus gaining control of nearly 100% of the market for nongovernmental accreditation, COPA hoped to compete with the U.S. Commissioner of Education's growing program to approve accreditors. Shimberg, The Relationship Among Accreditation, Certification, and Licensure 15 (1983) (unpublished manuscript).

¹⁴⁶ One can imagine cases in which the merging credentialing bodies have other functions that may be efficiently integrated. For example, two professional associations providing lobbying and other services to their members might seek to merge. Even in such cases, however, the rule should be, as usual, that the elimination of desirable competition in any market invalidates the merger. See, e.g., Brown Shoe Co. v. United States, 370 U.S. 294, 311-23 (1962); United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 370 (1963). Possibilities for spinning off one of the competing credentialing programs should therefore be considered.

¹⁴⁷ Though their actions do not constitute a merger of credentialing bodies in the sense discussed here, several states have virtually eliminated the distinction between osteopathy and allopathic medicine. See New York State Osteopathic Soc'y v. Allen, 26 N.Y.2d 20,256 N.E.2d 510,308 N.Y.S.2d 342 (1970), where the plaintiff society sought unsuccessfully to compel New York State to remove M.D. degree designations from the licenses of fifty D.O.s who were graduates of a California college of osteopathy that later became a medical school; Osteopathic . Physicians and Surgeons of Cal. v. California Med. Ass'n, 224 Cal. App. 2d 378, 36 Cal. Rptr. 641 (1964) (merger agreement between defendant and California Osteopathic Association held valid). See also Editorials, 70 J. Am. Osteo. Ass'n 13 (1970); 69 J. Am. Osteo. Ass'n 317, 445 (1969). The loss of the distinction between different philosophies has potentially adverse consequences for competition. See references cited supra note 80; Part One, nn. 109, 205.

¹⁴⁸ As its reason for withdrawal, the AMA cited “fundamental differences in philosophy between AMA and LCCME in the approach to establishing and maintaining standards, and the evaluation of continuing medical education.” AMA, 79th Annual Report on Medical Education in the United States, 243 J. A.M.A. 842-43 (1980).

¹⁴⁹ AMA, 80th Annual Report on Medical Education in the United States, 244 J. A.M.A. 2805, 2806 (1980).

¹⁵⁰ AMA, 81st Annual Report on Medical Education in the United States, 246 J. A.M.A. 2911 (1981)Google Scholar. Representatives of the Federation of State Medical Boards and the Association for Hospital Medical Education were added to the membership at that time.

¹⁵¹ ‘ The vast body of CME literature demonstrates a wide range of possible types, formats, and levels of CME, as well as great disagreement over both goals and means. CME can be geared to requirements for state relicensure, medical specialty society membership, or board certification—each meeting different standards for breadth and depth of knowledge. It can be offered by a specialty board or society, a state licensure board, a hospital, a medical school, or a private commercial organization—each with a different focus or emphasis. It can also take many forms: standardized testing, self-assessment, formal course work, weekend lectures, clinical requirements, or personal reading. And it may be either narrowly or broadly related to the physician's practice. See generally H. Shuchman, Self-Regulation in the Professions 237-42 (1981); B. Shimberc, Occupational Licensing: A Public Perspective 122-37 (1980); Bloom, Second Thoughts on CME, Med. World News, Nov. 12, 1979, at 53; Stein, , Accreditation of Continuing Medical Education and Public Credibility, 55 Bull. N.Y. Acad. Med. 346 (1979)Google Scholar; AMA, 78th Annual Report on Medical Education in the United States, 240 J. A.M.A. 2848 (1978)Google Scholar; Lewis, & Hassenein, , Continuing Medical Education—An Epidemiological Evaluation, 282 New Eng. J. Med. 254(1970)CrossRefGoogle Scholar.

¹⁵² In fact, a few specialty societies have their own accreditation schemes and require that CME programs offered to their members meet those requirements as well as the ACCME's. Most notably, the American Academy of Family Physicians, the first specialty society to require CME, has maintained a separate system since the 1940's, and in 1976 the American College of Emergency Physicians instituted an accreditation requirement to “complement” existing accreditation. See Bloom, supra note 151, at 54; Stein, supra note 151, at 347. The availability of alternative CME accreditors would be relevant to the legal analysis of a merger. See supra note 145 and accompanying text.

¹⁵³ See Petty, Political Gains, Grassroots Problems, Med. World News, June 9, 1980, at 39, 50; AMA Dumps Cohorts in CME Accrediting, Med. World News, Aug. 20, 1979, at 11; AMA to Resume Responsibility for Accrediting CME Programs, Am. Med. News, Aug. 3-10, 1979, at 1.

¹⁵⁴ The philosophical differences asserted to exist between the AMA and the other component organizations of the LCCME included disagreement over the place of federal funding in medical education, the needs and proper contributions of practicing physicians in CME and CME accreditation, and the role of state medical societies in accreditation. See, e.g., AMA, supra note 148; CME Schism, Med, World News, NOV. 12, 1979, at 60. Other differences appeared to exist as well. The AMA's accreditation was geared primarily to small ∼ traditional teaching settings, and its CME requirements were broad minimal standards. See Stein, supra note 151. During the “schism,” the LCCME proposed changes that would have made standards more exacting and provided for greater curriculum flexibility. See A Proposal for Sweeping Changes in CME, Med. World News, Feb. 18, 1980, at 22. After remerger, the new ACCME adopted changes which resemble, but fall short of duplicating, those proposals. See CME Criteria Made More Exacting, Med. World News, Feb. 15, 1982, at 29.

¹⁵⁵ AMA, supra note 149, at 2806.

¹⁵⁶ See id.; CME Schism, supra note 154. It is notable that the brief existence of competing accreditation schemes for CME created no reported problems for consumers of CME but “engendered a substantial amount of confusion and disarray among organizations and institutions offering continuing education programs.” Id. (emphasis added). Though complaining of confusion and increased paperwork, CME program sponsors probably were troubled also by the prospect of diversity in the marketplace and the need to choose a competitive response.

¹⁵⁷ United States v. Penn-Olin Co., 378 U.S. 158, 173 (1964). See also United States v. Falstaff Brewing Co., 410 U.S. 526 (1973); Brodley, , Potential Competition Mergers: A Structural Approach, 87 Yale L.J. 1 (1977)CrossRefGoogle Scholar.

¹⁵⁸ The LCCME was formed in 1975 by representatives from the ABMS, the Council of Medical Specialty Societies, the Association of American Medical Colleges, the American Hospital Association, and the AMA, whose Council on Medical Education had since 1966 acted as sole accreditor of CME programs. See AMA, supra note 151, at 2813.

¹⁵⁹ A similar analysis might be applied to the AMA's Accreditation Council for Graduate Medical Education (ACGME), whose task it is to accredit residency programs. The ACGME is comprised of representatives of the Association of American Medical Colleges, the ABMS, the American Hospital Association, the AMA, and the Council of Medical Specialty Societies. See AMA, supra note 150. Like the ACCME, the ACGME constitutes an illegal joint venture under the theory advanced here.

¹⁶⁰ See generally Brodley, , Potential Competition Under the Merger Guidelines, 71 Calif. L. Rev. 376 (1983)CrossRefGoogle Scholar; Brodley, supra note 157; Turner, , Conglomerate Mergers and Section 7 of the Clayton Act, 78 Harv. L. Rev. 1313, 1384-86 (1965)CrossRefGoogle Scholar.

¹⁶¹ United Mine Workers v. Pennington, 381 U.S. 657 (1965); Eastern R.R. Presidents Conference v. Noerr Motor Freight, 365 U.S. 127 (1961); Missouri v. Now, 620 F.2d 1301 (8th Cir.), cert. denied, 449 U.S. 842 (1980).

¹⁶² If the joint venturers are each competitor-sponsored, their credentialing or accrediting might be said to involve commercial speech, which is entitled to somewhat less first amendment protection than other kinds of speech. See Part One, nn. 215-22 and accompanying text.

¹⁶³ See Part One, nn. 52-57 and accompanying text.

¹⁶⁴ See generally 3 Lewin Report, supra note 31, at 38-41. The AMA and the APTA collaborated in accrediting physical therapy training programs from the 1930s until their split in 1976, which resulted from a long disagreement. The AMA's current Essentials define the physical therapist's role as strictly secondary to the referring physician's. See Joint Review Comm. For Physical Therapy Education, Essentials and Guidelines for Accredited Educational Programs for the Physical Therapist (1979). On the other hand, the APTA expects programs to train therapists to design, manage, and implement care plans independently of the referring practitioner. See APTA, Standards for Accreditation of Physical Therapy Educational Programs (1978). In practice, most training programs have dual accreditation and prepare students for the widest scope of practice permitted by state laws, which vary in restrictiveness and are subject to liberalization. Even in restrictive states, many referring physicians allow therapists to exercise independent judgment. Although significant practice issues still exist with respect to supervision, referral, and reimbursement, there appears to be a trend towards greater flexibility, largely as a result of the APTA's efforts and influence.

¹⁶⁵ For a recent example of disagreement, see Lewis, supra note 20. The position reported in this news report conflicts with stated AMA policy, as discussed in id. and in AMA, supra note 20.

Another useful example of the differing opinions of competitors over operating standards involves free-standing emergency care centers. The AMA has promulgated guidelines proposing staffing, supplies, and hours of operation that differ from the standards applied by the National Association of Freestanding Emergency Centers (NAFEC). See Trade Restraint Suit Filed Against AMA, Med. World News, Aug. 8, 1983, at 75; Urge-Centers Say AMA Restrains Trade, 12 Health Pol'y Week, July 18,1983, at 3. NAFEC has complained to the FTC that the AMA seeks to squelch competition by enforcing its guidelines. Absent proof of a boycott, however, the AMA should be free to opine as to what constitutes a safe emergency center, just NAFEC is free to differ. Joint promulgation by these bodies of negotiated standards acceptable to both would appear to deny consumers dearly valuable information.

¹⁶⁶ Two articles by Professor First suggest that the ABA and AALS have operated in concert, applying almost identical standards. First I and First II supra note 130. But see Vernon, President's Message, AALS Newsletter, Feb. 1983, at 1 (predicting increasingly different roles for the two accreditors, with the AALS setting high standards emphasizing a scholarly orientation).

¹⁶⁷ In contrast to the universal requirement that only graduates of accredited (or foreign) medical schools may seek state licensure, only twenty-six states specifically limit bar examination admission to graduates of ABA-accredited law schools, and no state requires AALS accreditation. An additional twenty states impose some form of accreditation requirement, usually requiring accreditation but not specifying the ABA as the only acceptable accreditor. In a few instances, graduates of unaccredited schools must demonstrate receipt of an equivalent education. Although these laws considerably reduce the opportunities of non-ABA law schools, such schools do exist and prosper in a few places. See First I and First II, supra note 130; Fossum, , Law School Accreditation Standards and the Structure of Legal Education, 1978 Am. Bar Found. Research J. 1515Google Scholar.

¹⁶⁸ See supra notes 9-11.

¹⁶⁹ See, e.g., sources cited supra notes 11 and 13.

¹⁷⁰ An obvious corollary to this argument is that the Secretary of Education should withdraw recognition of the LCME as an accreditor of medical schools. Even if the Secretary is unwilling to decide that its joint sponsorship violates the Sherman Act, he would still be free to act on the basis of a natural and appropriate concern for educational diversity. See Boyer letter, supra note 10, at 15. A decision to cease recognizing the LCME might stimulate its reorganization under different auspices or the creation of new accreditors better situated to express and implement divergent philosophies of medical education and care.

¹⁷¹ See R. Stevens, supra note 11, at 87, 91-92, 119; Affeldt, , Voluntary Accreditation, in Regulating Health Care: The Struggle for Control 182 (Levin, A. ed. 1980)Google Scholar. The ACS apparently developed its first hospital standards largely to ensure that hospitals kept records sufficient to permit evaluation of candidates for ACS fellowship on the basis of their past surgical performance. If the formation of the JCAH in 1952 was lawful because, say, the ACS could no longer afford to support the scale of effort needed, it would not follow that the joint venture, which operates under a continuing agreement, remains lawful today. The venture's legality is a function of circumstances and may change over time. Cf. United States v. Pan Am. World Airways, 193 F. Supp. 18 (S.D.N.Y. 1961), rev'd on other grounds, 371 U.S. 296 (1963).

¹⁷² If break-up of the JCAH should significantly diminish the prestige associated with accreditation, the successor accreditor might not be able to charge accreditation fees sufficient to support a review effort as extensive as the present one, and any resulting loss in the quality of accreditation services might be urged as a basis for permitting the more broadly-based joint venture. One answer to this argument might be that a joint venture's enhancement of competition in one market (e.g., information) cannot be used to justify adverse effects on competition in another market (e.g., services). United States v. Philadelphia Nat'l Bank, 374 U.S. 321, 370 (1963); United States v. Topco Assocs., Inc., 405 U.S. 596, 611-12 (1972) (principle stated but misapplied when all effects were within a single market for retail groceries). In addition, however, even if one concentrates on the separate market for information, it is quite possible the consumers would be better served by sacrificing some economies of scale that permit thoroughness in hospital accrediting and by fostering diversity in ideas about hospital quality. In any event, changing the sponsorship of the JCAH's accreditation program would not interfere with its ability to realize scale economies or even to operate as a natural monopoly. See supra notes 70-75 and accompanying text. Any adverse consequences resulting from its loss of prestige or credibility would be attributable not to a loss of efficiency but to an appropriate strengthening of competition in the information marketplace. .

¹⁷³ The organizational structure of hospitals has been convincingly shown to be inefficient from the standpoint of cost containment because of a lack of control over physicians. Harris, , Regulation and Internal Control in Hospitals, 55 Bull. N.Y. Acad. Med. 88 (1979)Google Scholar; Harris, , The Internal Organization of Hospitals and Economic Implications, 8 Bell J. Econ. 467 (1977)CrossRefGoogle Scholar. Although Harris does not so observe, this inefficient structure did not become nearly universal by chance or by the operation of market forces but is attributable in large measure to physicians’ collective influence and to JCAH standards dictated by the needs and priorities of physicians.

¹⁷⁴ For discussion of an antitrust attack on JCAH standards to this effect, see Part One, text accompanying nn. 176-78, where it is argued that such a standard should be upheld. Nevertheless, fearing antitrust liability for adhering to a standard having exclusionary effects, the JCAH has recently revised its position on clinical privileges for nonphysicians. See JCAH Votes for Hospital Option in Granting Admitting Privileges to Non-MD's, Med. World News, Jan. 9, 1984. at 9.

¹⁷⁵ Other private higher-tier accreditare are the Council on Postsecondary Accreditation (COPA), a private accreditor of educational accreditors, see supra notes 133, 145, and the American National Standards Institute (ANSI), a coordinator of industrial standards bodies and certifiers. See Science Policy Research Division, Congressional Research Service of the Library of Congress, Report to the Subcommittee on Science, Research and Development of the House Committee on Science and Astronautics, Voluntary Industrial Standards in the United States 28-31 (1974); FTC, Proposed Rule and Staff Report, Standards and Certification 18-20 (1978).

¹⁷⁶ See discussion in Part One, nn. 14, 199 and accompanying text.

¹⁷⁷ The NCHCA appears to be sincerely devoted to the purely technical improvement of the certification function. See supra text accompanying notes 139-41. As prior discussion has made clear, however, even the most straightforwardly “technical” standards and quality judgments inevitably incorporate ideology and opinion at the certification level. See Part One, nn. 200-07 and accompanying text; see also supra notes 76-78 and accompanying text. There is no reason to expect that the decisions of higher-tier bodies are less entangled with non-objective factors.

¹⁷⁸ Under the theories advanced above, however, proof of a structural violation might be somewhat easier than proof of a particular standard's invalidity.

¹⁷⁹ By means of a conduct-oriented remedy, plaintiffs can obtain credentials that give them market power and a status apparently equivalent to that enjoyed by individuals already possessing those credentials; a structural remedy, on the other hand, would not entirely eliminate the differentiation and competitive disadvantage of which the plaintiff complains. Similar problems arise under the “essential facilities” doctrine of antitrust law discussed in Part One, text accompanying nn. 151-53. See, e.g., United States v. Terminal R.R. Ass'n, 224 U.S. 383 (1912), which Judge Posner has suggested merely vindicated the interests of a railroad “complaining about its exclusion from a cartel.” Marrese v. American Academy of Orthopaedic Surgeons, 706 F.2d 1488, 1495 (7th Cir. 1983).

¹⁸⁰ One problem with this suggestion is that a defendant is unlikely to defend on the ground that the plaintiff failed to challenge its more fundamental vice and to seek the more sweeping relief to which he is entitled. Courts in treble damage suits are frequently misled by private parties whose incentives to make certain arguments or seek certain relief are not perfectly congruent with the public interest. A role is suggested for amici curiae (including public prosecutors) in such cases, as well as for enlightened judges.

¹⁸¹ Virginia Academy of Clinical Psychologists v. Blue Shield, 624 F.2d 476 (4th Cir. 1980).

¹⁸² Id. at 481.

¹⁸³ See FTC supra notes 21 and 91.

¹⁸⁴ The structural problems in the two cases differ, of course. Professional control of Blue Shield plans is challengeable as price-fixing if the Blue Shield joint venture is controlled by an organization likely to be judged too powerful by antitrust standards. See Havighurst & Hackbarth, supra note 57, at 381-82. Credentialing, on the other hand, draws procompetitive horizontal distinctions accross the entire market and, not being viable on any lesser scale, cannot be attacked because of the horizontal market power possessed by its sponsors; such structural violations as might be identified consist of collaboration by bodies competing or potentially competing in the production of information.

¹⁸⁵ Indeed, plaintiffs, in successfully opposing defendant's certiorari petition in the Supreme Court, argued that the lower court's decision turned on a finding of such an illegal boycott. Under this reading, the court's emphasis on physician control may have served only to establish the boycott's anticompetitive impact on the boycotters’ competitors. See Part One, n. 140 and accompanying text.

¹⁸⁶ Blue Shield plan subscribers were allowed to claim damages for the violations found in Virginia Academy. Blue Shield of Va. v. McCready, 102 S. Ct. 2540 (1982). Prospective relief was obviated by the existence of legislation prohibiting discrimination against psychologists. In addition, it seems likely that the defendants fearing similar results in other cases, would voluntarily break their ties with the medical profession.

¹⁸⁷ Ohio ex rel Brown v. Joint Comm'non Accred. of Hosps., No. C-2-79-1158 (S.D. Ohio, filed Dec. 14, 1979). See discussion in Part One, nn. 176-78 and accompanying text. This litigation is probably rendered moot by recent developments, see supra note 174, but the plaintiff could shift the ground of its attack.

¹⁸⁸ Though not the focus of this Article, public provision or subsidization of information can be an appropriate intervention in the marketplace, offsetting the market failure that results in an undersupply of information by the private sector. Among the mechanisms already in place for compiling and disseminating information about health care practitioners are the Congressional Office of Technology Assessment and various agencies and research programs within HHS. Mandating disclosure of certain facts by providers may also be an appropriate strategy for improving the performance of health care markets.