The Virginia Board of Medicine Violated the Antitrust Laws

PillsLast week was a big antitrust week for the new law firm of Bona Law PC. First, it was the ABA Antitrust Spring Meeting, where antitrust lawyers from all over the world descend upon Washington, DC to obsess over antitrust and competition for several days. Second, I was writing an antitrust brief in a significant antitrust case.

Finally, I argued at a motion-to-dismiss hearing in the case Dr. Yvoune Kara Petrie, DC v. Virginia Board of Medicine, et al. I represent Yvoune Petrie, a doctor of chiropractic, in an antitrust lawsuit (Sherman Act, Section 1) against the Virginia Board of Medicine and several of its board members. Update: We survived the motion to dismiss.

With my client’s permission, I thought I’d tell you a little more about it.

As you might recall, I have experience and expertise in antitrust lawsuits against state and local entities, and believe that some of the most pernicious harm to competition comes from government conduct.

My client is a well-educated doctor of chiropractic that successfully utilizes a functional and holistic approach to help her clients that focuses on solving the underlying causes of disease rather than merely addressing its symptoms, through pills or other means.

As you might imagine, her practice and that of other doctors of chiropractic overlap in many areas with medical doctors. And, as is the case in many fields, the distinct professions are actually competitors for patients.

The Virginia Board of Medicine, however, is controlled and dominated by medical doctors. These medical doctors reached an agreement to limit the scope of chiropractic in such a way as to limit competition that medical doctors face from doctors of chiropractic. This is a per se antitrust violation.

These scope-of-practice restrictions cause serious anti-competitive problems that increase the costs of health-care, while at the same time harming both the quality and choices that patients receive. Indeed, the FTC has recently focused its attention on the issue. Scope-of-practice restrictions also severely hamper innovation, which is pretty darn important when it comes to our health.

You can read the complaint for yourself; it is very descriptive. But I will leave you with the introduction of the complaint—the first nine paragraphs describing the nature of the action—below. These paragraphs illustrate a common pattern of how anti-competitive conduct develops, and are broadly applicable to other fields and markets.

Enjoy!

1.          Virginia chiropractors threaten the profits and lifestyle of Virginia medical doctors.  From the medical doctor’s perspective, chiropractors are invading their “turf” by treating patients’ conditions and the underlying causes of their conditions both less expensively and often more effectively.  Moreover, throughout the country, chiropractors are often replacing medical doctors for patients’ point of primary care.  With growing calls for better patient care at lower costs, this competitive threat is a serious problem for medical doctors.  Indeed, health care and its skyrocketing costs invade policy debates year-after-year.

2.          The competitive threat to medical doctors from Virginia chiropractors, however, is representative of a much broader movement that challenges our current healthcare structure of treating symptoms of disease and other problems instead of creating overall wellness through holistic and functional approaches that focus on the underlying processes (including diet and lifestyle) that create disease and other problems.  These “alternative” approaches to healthcare have the potential to both revolutionize peoples’ lives and save a lot of money (without resorting to a government-run health-plan).  Chiropractors, including Virginia chiropractors, are on the cutting-edge of these innovative approaches. However, like any industry threatened with “disruptive” models or technology, medical doctors have a strong incentive to take whatever actions are necessary to slow this new approach, however beneficial. And that is exactly what the Virginia Board of Medicine and its majority-controlled medical doctors have done.

3.          Competition among service-providers is good for the customer because the suppliers must lower prices or improve their service to persuade consumers to select them over the supplier’s competitor.  Indeed, the U.S. Supreme Court has explained that “[t]he heart of our national economy has long been faith in the value of competition.” See National Soc’y of Prof’l Eng’rs v. United States, 435 U.S. 679, 695 (1978).

4.          Sometimes an entrenched class of providers will begin to face competition from different types of providers that compete through new or different services, better prices, more effective delivery of services, or an alternative approach.  When this happens—and it happens a lot—it is uncomfortable.  The entrenched providers may see their profits shrink, their customers might come around less, and their current operations—which may have stayed the same for years or decades—are no longer adequate.

5.          The entrenched providers can take one of two paths when facing a new competitive threat.  The first path is to compete better: the service-provider might reduce prices, improve services, or sometimes even change their entire approach to better keep and attract customers.  Complacency is the enemy of this path.  This first path represents the foundation of our economic system and collectively improves our lives every day.

6.          The second path focuses on the competitor instead of competition: the service- provider attacks the new competitors and finds some way to keep them from effectively competing for customers.  From the psychological perspective of the entrenched provider, it is understandable.  They are used to a way of life and do not want to change.  Moreover, after years of following and living an approach, it is not uncommon that these entrenched providers— themselves feeling threatened—might reflexively attack their competitors rather than looking in the mirror and improving their own business.

7.          This second path is well traveled and is one of the reasons we have the federal antitrust laws, which embody “fundamental national values of free enterprise and economic competition.” See FTC v. Phoebe Putney Health System, Inc., 133 S.Ct. 1003, 1010 (2013).  The entrenched provider that eliminates its competitor from its market harms competition, and therefore consumers.  The federal antitrust laws protect competition by creating a cause of action for competitors that are harmed through anticompetitive conduct—often exercised on this second path.

8.          The Plaintiff seeks antitrust relief because the medical doctors on the Virginia Board of Medicine (the “Board” or “Defendant”) joined together to keep Plaintiff, a Virginia Chiropractor and primary care provider, from competing against medical doctors in areas where their respective customers overlap.  Recognizing the increasing competitive threat of chiropractors in Virginia and elsewhere to medical doctors, these medical doctors travelled down the second path—by exercising their market power to keep medical-doctor competitors, like chiropractors, from invading their “turf.”

9.          This is a case by a solitary chiropractor against a powerful board and some of the medical doctors that dominate it. She stands alone on the caption, but brings this case—not only to vindicate her own rights and competitive injuries—but to stand up for the many other chiropractors and other holistic and alternative-health providers that are constantly bullied by state medical boards and doctors. She brings this case for her patients and the patients of those like her—health providers that see a better way of helping people live healthy than the tired method of healthcare monopolized by medical doctors. She brings this case so she and others like her have the opportunity to compete to improve and save lives.