Prior to the completion of its construction, petitioner, a
private, acute care community hospital in the Kansas City, Mo.,
metropolitan area, sought to enter into a participating hospital
agreement with respondent Blue Cross of Kansas City (Blue Cross), a
nonprofit provider of individual and group health care
reimbursement plans in the area. Blue Cross refused on the basis of
its policy barring participation by any new hospital that could not
show that it was meeting a clearly evident need for health care
services in its service area. Blue Cross relied on petitioner's
failure to obtain approval for construction from the Mid-America
Health Systems Agency (MAHSA), a private, nonprofit, federally
funded corporation which was the local "health system agency" (HSA)
designated for the area under the National Health Planning and
Resources Development Act of 1974 (NHPRDA). MAHSA's major function
is health planning for the Kansas City metropolitan area.
Petitioner had not sought approval of its construction from MAHSA
because of the latter's announced policy that it would not approve
any addition of acute care beds in view of its determination that
there was a surplus of hospital beds in the area. Alleging a
wrongful refusal to deal and a conspiracy between Blue Cross and
MAHSA, which resulted in a competitive disadvantage to it,
petitioner filed suit against respondents Blue Cross and the
National Blue Cross Association for violation of the Sherman Act.
Respondents contended that the NHPRDA had impliedly repealed the
antitrust laws as applied to the conduct in question. The District
Court granted judgment for respondents, finding a clear repugnancy
between the NHPRDA and the antitrust laws, and congressional intent
to repeal the antitrust laws in this context. The Court of Appeals
affirmed.
Held: Although respondents may have acted with only the
highest motives in seeking to implement the plans of the local HSA,
they cannot defeat petitioner's antitrust claim by the assertion of
immunity from the requirements of the Sherman Act. Pp.
452 U. S.
388-393.
Page 452 U. S. 379
(a) Implied antitrust immunity can be justified only by a
convincing showing of clear repugnancy between the antitrust laws
and the regulatory system. Even when an industry is regulated
substantially, this does not necessarily evidence an intent to
repeal the antitrust laws with respect to every action taken within
the industry. And intent to repeal the antitrust laws is much
clearer when a regulatory agency has been empowered to regulate the
type of conduct under antitrust challenge. Pp.
452 U. S.
388-389.
(b) The action challenged here was neither compelled nor
approved by any governmental regulatory body. Instead, it was a
spontaneous response to the finding of only an advisory planning
body, the local HSA which, under the NHPRDA, has no regulatory
authority over health care providers. And the application of the
antitrust laws to the Blue Cross' conduct would not frustrate a
particular provision of the NHPRDA or create a conflict with the
orders of any regulatory body. Nor does the NHPRDA require Blue
Cross to take an action that, in essence, sought to enforce the
advisory decision of MAHSA. There Is no reason to believe that
Congress specifically contemplated "enforcement" of advisory
decisions of an HSA by private insurance providers, let alone
relied on such actions to put "teeth" into the noncompulsory local
planning process. Pp.
452 U. S.
389-391.
(c) And NHPRDA is not so incompatible with antitrust concerns as
to create a "pervasive" repeal of the antitrust laws as applied to
every action taken in response to the health care planning process.
Respondents have failed to make the showing necessary for an
exemption of all such actions. Pp.
452 U. S.
391-393.
628 F.2d 1050, reversed and remanded.
POWELL, J., delivered the opinion for a unanimous Court.
Page 452 U. S. 380
JUSTICE POWELL delivered the opinion of the Court.
The petitioner in this case, National Gerimedical Hospital and
Gerontology Center (National Gerimedical) filed an antitrust suit
against respondents, Blue Cross of Kansas City (Blue Cross) and the
national Blue Cross Association, challenging the refusal of Blue
Cross to accept petitioner as a participating member provider under
its health insurance plan. The issue presented here is whether this
refusal by Blue Cross is immunized from antitrust scrutiny because
it was intended to aid implementation of the plans of the "health
systems agency" designated for the Kansas City area under the
National Health Planning and Resources Development Act of 1974.
I
Petitioner National Gerimedical is a private, acute care
community hospital opened in 1978 in the Kansas City, Mo.,
metropolitan area. [
Footnote 1]
Prior to the completion of construction, petitioner sought to enter
into a participating hospital agreement with Blue Cross, a
nonprofit provider of individual and group health care
reimbursement plans in Missouri and Kansas. Under such an
agreement, participating hospitals receive direct reimbursement of
the full costs of covered services rendered to individual Blue
Cross subscribers. [
Footnote 2]
When subscribers receive care in hospitals that are not
participating members, Blue Cross pays only 80% of the cost, and
these payments are made to the subscriber, rather than directly to
the hospital.
Page 452 U. S. 381
Blue Cross refused to enter into a participating hospital
agreement with petitioner on the basis of its official policy
barring participation by any new hospital that could not show that
it was meeting "a clearly evident need for health care services in
its defined service area." [
Footnote 3] In determining that petitioner had not
satisfied this requirement, Blue Cross relied on petitioner's
failure to obtain approval for construction from the local "health
systems agency" or "HSA" -- the Mid-America Health Systems Agency
(MAHSA). [
Footnote 4] This
agency is a private, nonprofit corporation, federally funded under
the National Health Planning and Resources Development Act of 1974
(NHPRDA), 88 Stat. 2229, as amended, 42 U.S.C. § 300
l
(1976 ed. and Supp. IV). Its major function is health planning for
the Kansas City metropolitan area.
In conducting its planning functions, MAHSA had determined that
there was a surplus of hospital beds in the area,
Page 452 U. S. 382
and had announced that it would not approve any addition of
acute care beds in area hospitals. As a result of this announced
policy, petitioner did not seek MAHSA approval of its construction,
leading to the refusal of participating hospital status by Blue
Cross.
Claiming that this refusal by Blue Cross put it at a competitive
disadvantage, petitioner filed suit in the United States District
Court for the Western District of Missouri against Blue Cross and
the national Blue Cross Association. It claimed violations of §§ 1
and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, alleging a wrongful
refusal to deal and a conspiracy between Blue Cross and MAHSA.
[
Footnote 5] As relief,
petitioner sought treble damages and an injunction to prevent
future violations.
Respondents moved to dismiss the complaint on the ground that
the NHPRDA had impliedly repealed the antitrust laws as applied to
the conduct in question. [
Footnote
6] The District Court treated this motion as one for summary
judgment, and granted judgment for respondents.
479 F.
Supp. 1012 (1979). It reasoned that, if private parties seeking
to effectuate the planning objectives of an HSA could be subjected
to antitrust liability, accomplishment of the goals of the NHPRDA
would be frustrated.
Id. at 1021. Having found a "clear
repugnancy,"
id. at 1024, between this Act and the
antitrust laws, the court relied largely on legislative history for
the view that
"Congress intended that action taken pursuant to the Act and
clearly within the scope of the Act would be exempt from
application of the antitrust laws."
Ibid.
Page 452 U. S. 383
The United States Court of Appeals for the Eighth Circuit
affirmed, essentially adopting the reasoning of the District Court.
628 F.2d 1050 (1980). The Court of Appeals agreed with the District
Court's
"finding of clear repugnancy between the Act and the antitrust
laws, as the Act and regulatory scheme clearly call for the action
which has now become the basis of an antitrust claim."
Id. at 1055-1056. It then quoted in full the District
Court's argument for the view that Congress intended repeal of the
antitrust laws in this context.
We granted a writ of certiorari to review this important
question. 449 U.S. 1123 (1981).
II
Our decision in this case requires careful attention to the
structure and goals of the NHPRDA, as well as a review of this
Court's decisions in the area of implied repeals of the antitrust
laws. We begin with a description of the complex scheme of
regulatory and planning agencies established by the NHPRDA in order
to assess the legal significance of that Act with respect to the
antitrust claim brought here.
MAHSA, the health systems agency whose refusal to approve new
hospital construction in the Kansas City area prompted Blue Cross
not to accept petitioner as a participating hospital, is but one
part of a larger statutory scheme. The NHPRDA, 42 U.S.C. § 300k
et seq., created federal. state, and local bodies that
coordinate their activities in the area of health planning and
policy. Building on existing planning and development statutes,
[
Footnote 7] Congress sought in
1974
Page 452 U. S. 384
to create a statutory scheme that would assist in preventing
overinvestment in and maldistribution of health facilities.
See 1974 Senate Report at 39.
HSA's such as MAHSA are concerned with health planning in a
particular metropolitan area.
See generally H.R.Rep. No.
93 1382, pp. 401 (1974). Each is a nonprofit private corporation,
public regional planning body, or single unit of local government,
serving a particular "health service area." 42 U.S.C. §
300
l-1(b)(1). The statute requires that a majority of HSA
board members be consumers of health care, and that at least 40% be
health care "providers." 300
l-1(b)(3)(C). The "primary
responsibility" of each HSA is
"effective health planning for its health service area and the
promotion of the development within the area of health services,
manpower, and facilities which meet identified needs, reduce
documented inefficiencies, and implement the health plans of the
agency."
§ 300
l-2(a). As originally enacted, the Act established
four general goals: "improving the health of residents,"
"increasing the accessibility . . . , acceptability, continuity,
and quality of . . . health services," "restraining increases in
the cost of . . . health services," and "'preventing unnecessary
duplication of health resources." § 300
l-2(a). [
Footnote 8] To accomplish these goals,
the Act requires each HSA to formulate a "detailed statement of
goals" called a "health systems plan," § 300
l-2(b)(2), an
"annual implementation plan" describing the objectives that will
achieve the goals of the general plan, § 300
l-2(b)(3),
Page 452 U. S. 385
and "specific plans and projects for achieving the objectives
established in the" annual implementation plan, §
300
l-2(b)(4). Each HSA is instructed to
"seek, to the extent practicable, to implement [its plans] with
the assistance of individuals and public and private entities in
its health service area."
§ 300
l-2(c)(1). In addition, it may provide "technical
assistance" to individuals and public and private entities for the
development of necessary projects and programs, §
300
l-2(c)(2), and should use grants and contracts to
encourage these projects and programs, § 300
l-2(c)(3). The
agencies do not possess regulatory authority over health care
providers.
�
At the state level, the Act created two separate bodies. The
first, a State Health Planning and Development Agency, is a state
agency created by agreement between a Governor and the Federal
Government.
See § 300m. It is intended to perform certain
crucial functions that cannot be undertaken by local HSA's:
"Specifically, the integration and synthesis of areawide health
plans into a Statewide health plan, the establishment of priorities
within the State, and the performance of regulatory functions are
most appropriately carried out at the State level. The latter
function can appropriately be carried out only by an agency of
State government."
1974 Senate Report at 52. Each state agency must be governed by
a "State Program," which the Secretary of Health and Human Services
may approve only if it meets guidelines set out in 42 U.S.C. §§
300m-1, 300m-2. Included in these guidelines is the requirement
that each State establish a "certificate of need" program under
which all new institutional health facilities must seek state
approval prior to construction. § 300m-2(a)(4)(A). [
Footnote 9] This procedure is
"the basic component in an
Page 452 U. S. 386
overall effort to control the unnecessary capital expenditures
which contribute so greatly to the total national health bill."
S.Rep. No. 96-96, p. 5 (1979) (hereinafter 1979 Senate
Report).
The State Health Planning and Development Agency is advised by a
Statewide Health Coordinating Council, composed in part of
representatives of local HSA's. This council is empowered to review
the plans of HSA's, review and revise state plans, and make
recommendations with respect to applications for federal funds from
HSA's and States. 42 U.S.C. § 300m-3(c).
In addition to various review functions, the Federal Government
plays a separate role in this statutory scheme. The NHPRDA requires
the Secretary of Health and Human Services to issue guidelines
concerning the appropriate supply, distribution, and organization
of health resources. § 300k-1;
see 42 CFR § 121.1
et
seq. (1980). Finally, the Act created a National Council on
Health Planning and Development to advise the Secretary on these
guidelines and on the general administration of the Act. 42 U.S.C.
§ 300k-3.
This elaborate planning structure was intended by Congress to
remedy perceived deficiencies in the performance of the health care
industry as it existed prior to 1974. The problems addressed fall
into two categories. First, there was concern that marketplace
forces in this industry failed to produce efficient investment in
facilities and to minimize the costs of health care. [
Footnote 10] In addition, Congress
sought to reduce the maldistribution of health care facilities.
[
Footnote 11]
Page 452 U. S. 387
In 1979, Congress amended the NHPRDA substantially in the Health
Planning and Resources Development Amendments of 1979, Pub.L.
96-79, 93 Stat. 592. A purpose of these Amendments was to
"[d]irect that special consideration be given throughout the
planning process to the importance of maintaining and improving
competition in the health industry."
1979 Senate Report at 3. [
Footnote 12] Toward this end, Congress added a number of
provisions requiring promotion of competition at the local, state,
and federal levels. 42 U.S.C. §§ 300k-2(b), 300
l-2(a)(5)
(1976 ed., Supp. IV); 42 U.S.C. § § 300n-1(c)(11), (1 2) (1976 ed.,
Supp . IV).
See generally H.R.Conf.Rep. No. 96-420, p. 58
(1979). In so doing, however, Congress recognized a distinction
between areas where competition could serve a useful purpose
and
Page 452 U. S. 388
those where some other allocation of resources remained
necessary. [
Footnote 13]
III
National Gerimedical contends that the denial by Blue Cross of
participating hospital status violated the antitrust laws. Blue
Cross defends on the ground that it acted pursuant to the local HSA
plan and only intended to further the purposes of the NHPRDA. It
argues that, despite the absence of any reference to the antitrust
laws in the NHPRDA, the creation of the planning structure
summarized above implied a repeal of those laws, as applied to this
conduct.
On a number of occasions, this Court has faced similar claims of
antitrust immunity in the context of various regulated industries.
The general principles applicable to such claims are well
established. The antitrust laws represent a "fundamental national
economic policy."
Carnation Co. v. Pacific Westbound
Conference, 383 U. S. 213 218
(1966);
see Lafayette v. Louisiana Power & Light Co.,
435 U. S. 389,
383 U. S.
398-399 (1978).
"Implied antitrust immunity is not favored, and can be justified
only by a convincing showing of clear repugnancy between the
antitrust laws and the regulatory system."
United States v. National Association of Securities
Dealers, 422 U. S. 694,
422 U. S.
719-720 (1975);
see Gordon v. New York Stock
Exchange, 422 U. S. 659,
422 U. S. 682
(1975);
United States v. Philadelphia National Bank,
374 U. S. 321,
374 U. S.
350-351
Page 452 U. S. 389
(1963).
"Repeal is to be regarded as implied only if necessary to make
the [subsequent law] work, and even then only to the minimum extent
necessary. This is the guiding principle to reconciliation of the
two statutory schemes."
Silver v. New York Stock Exchange, 373 U.
S. 341,
373 U. S. 357
(1963).
To be sure, where Congress did intend to repeal the antitrust
laws, that intent governs,
United States v. National
Association of Securities Dealers, supra; Gordon v. New York Stock
Exchange, supra, but this intent must be clear. Even when an
industry is regulated substantially, this does not necessarily
evidence an intent to repeal the antitrust laws with respect to
every action taken within the industry.
E.g., Otter Tail Power
Co. v. United States, 410 U. S. 366,
410 U. S.
372-375 (1973);
United States v. Radio Corp. of
America, 358 U. S. 334,
358 U. S. 346
(1959). Intent to repeal the antitrust laws is much clearer when a
regulatory agency has been empowered to authorize or require the
type of conduct under antitrust challenge.
E.g., United States
v. National Association of Securities Dealers, supra, at
422 U. S.
730-734;
Gordon v. New York Stock Exchange,
supra, at
422 U. S. 689,
422 U. S.
690.
In the present case, we must apply these precedents to an
industry with a regulatory structure quite different from those
considered previously. The action challenged here was neither
compelled nor approved by any governmental regulatory body.
Instead, it was a spontaneous response to the finding of an
advisory planning body, the local HSA, that there was a surplus of
acute care hospital beds in the Kansas City area. [
Footnote 14] Indeed, when respondents
refused to enter into
Page 452 U. S. 390
the agreement with petitioner, the regulatory aspects of the
NHPRDA -- controlled by the state health planning agencies -- were
not in place in Missouri. There simply was no regulation of this
hospital construction, as Missouri had not established any state
regulatory agency with authority to review hospital construction.
[
Footnote 15]
As a result, the claim of implied antitrust immunity in this
case is weaker than in previous cases. It cannot be argued that
application of the antitrust laws to the conduct of Blue Cross
would frustrate a particular provision of the NHPRDA or create a
conflict with the orders of any regulatory body. The record
discloses no formal request from MAHSA to Blue Cross to refrain
from accepting petitioner as a new participating hospital. Even if
such a request had been made, it could not have been more than the
advice of a private planning body -- albeit a planning body created
and funded by the Federal Government. This fact is crucial, because
antitrust repeals are especially disfavored where the antitrust
implications of a business decision have not been considered by a
governmental entity.
United States v. Radio Corp. of America,
supra, at
358 U. S. 339,
358 U. S. 346;
cf. Otter Tail, supra, at
410 U. S. 374
("When . . . relationships are governed in the first instance by
business judgment, and not regulatory coercion, courts must be
hesitant to conclude that Congress intended to override the
fundamental national policies embodied in the antitrust laws").
Page 452 U. S. 391
Respondents rely on the fact that a major function of an HSA is
planning in order to eliminate unnecessary duplication of hospital
services, 42 U.S.C. § 300
l-2(a)(4) (1976 ed., Supp. IV),
and point to statutory language requiring each HSA to "seek, to the
extent practicable, to implement its [health plans] with the
assistance of individuals and public and private entities in its
health service area," § 300
l-2(c)(1). Here, respondents
argue, the HSA found that petitioner was duplicating hospital
facilities unnecessarily, and Blue Cross merely sought to aid in
the "implementation" of that finding.
We are unpersuaded, however, that the provisions cited by
respondents are sufficient to create a "clear repugnancy" between
the NHPRDA and the antitrust laws, at least on the facts of this
case.
See n 18
infra. Nothing in the NHPRDA requires Blue Cross to take
an action that, in essence, sought to enforce the advisory decision
of MAHSA. HSA's themselves are required to seek private cooperation
only "to the extent practicable." 42 U.S.C. § 300
l2(c)(1).
And there is no reason to believe that Congress specifically
contemplated such "enforcement" by private insurance providers, let
alone relied on such actions to put "teeth" into the noncompulsory
local planning process. Congress expected HSA planning to be
implemented mainly through persuasion and cooperation. If an HSA
recommendation could be used to justify antitrust immunity for such
an act of private enforcement, this effectively would give that
recommendation greater force than Congress intended. [
Footnote 16]
As there is no direct conflict between the requirements of the
NHPRDA and the Sherman Act with respect to the conduct at issue
here, respondents' only remaining argument must be that the NHPRDA
immunizes all private conduct
Page 452 U. S. 392
undertaken in response to the health planning process. Arguably,
the fundamental assumption of Congress, particularly in 1974 when
it passed the original Act, [
Footnote 17] was that competition was not a relevant
consideration in the health care industry. If so, although that
industry is not regulated in any comprehensive fashion, it might be
concluded that Congress intended "pervasive" cooperation and
planning without the interference of antitrust suits.
This argument has some force, in light of the prominence
Congress gave to the view that "the health care industry does not
respond to classic marketplace forces." 1974 Senate Report at 39.
Perhaps it makes little sense in such a context to entertain
antitrust suits intended to promote or protect free competition. It
is clear, however, that respondents have failed to make the showing
necessary for an exemption of all actions of health care providers
taken in response to planning recommendations. In other industrial
contexts, we have refused such a blanket exemption, despite a clear
congressional finding that some substitution of regulation for
competition was necessary.
Carnation Co. v. Pacific Westbound
Conference, 383 U.S. at
383 U. S.
217-219 (maritime industry);
Otter Tail, 410
U.S. at
383 U. S.
373-374 (electric power industry). These holdings are
based on the guiding principle that, where possible,
"the proper approach . . . is an analysis which reconciles the
operation of both statutory schemes with one another, rather than
holding one completely ousted."
Silver, 373 U.S. at
373 U. S. 357.
There is no indication that Congress intended a different result
with respect to the health care industry. One manifestation of this
is the fact that, in the 1979 Amendments, Congress did not alter
the basic planning structure, even as it made plain its intent that
"competition and consumer choice" are to be favored wherever they
"can constructively serve . . . to advance the purposes of
quality
Page 452 U. S. 393
assurance, cost effectiveness, and access." 42 U.S.C. §
300k2(a)(17) (1976 ed., Supp. IV). [
Footnote 18]
We hold, therefore, that the NHPRDA is not so incompatible with
antitrust concerns as to create a "pervasive" repeal of the
antitrust laws as applied to every action taken in response to the
health care planning process. Moreover, as discussed above, there
was no specific conflict between the Act and the antitrust laws in
this case. Although respondents may well have acted here with only
the highest of motives in seeking to implement the plans of the
local HSA, they cannot defeat petitioner's antitrust claim by the
assertion of immunity from the requirements of the Sherman Act.
[
Footnote 19] As a result,
the judgment below must be reversed, and the case remanded.
It is so ordered.
[
Footnote 1]
As a Missouri hospital, petitioner has been licensed by the
Missouri Division of Health since September, 1977. It also has been
certified as a Medicare provider by the Department of Health and
Human Services.
[
Footnote 2]
All other acute care hospitals in the Blue Cross service area
are participating members.
[
Footnote 3]
On January 1, 1976, Blue Cross issued a summary of
"Prerequisites" by which it would be guided in deciding whether to
accept new participating hospitals. App. 141a. These included the
following:
"The hospital must meet a clearly evident need for health care
services in its defined service area. Health care institutions and
institutional services shall be approved, and/or, if required by
law, certified as necessary, by the designated planning agency or
areawide health planning agency respectively; or, when effective,
by the designated State Agency as provided for in Public Law
93-641, the 'National Health Planning and Resources Development Act
of 1974.'"
Id. at 146a. Blue Cross added that it retained the
final discretion in deciding whether to accept a new hospital, and
then included a warning to those contemplating new
construction:
"Because lack of knowledge by any applicant of this requirement
shall not be considered sufficient reason for waiving it, community
groups contemplating construction of new hospitals are urged to
consult with Blue Cross, if they expect to apply for participation
in the hospital service plan, at some time well in advance of
actual construction."
Ibid.
[
Footnote 4]
See n 3,
supra. In a newsletter issued on July 21, 1976, Blue Cross
announced that "[a]ll projects not reviewed and approved by these
Health Systems Agencies will not be reimbursable by Blue Cross of
Kansas City." App. 147a.
[
Footnote 5]
MAHSA was not named as a defendant. Petitioner also included
claims under Missouri's antitrust laws.
[
Footnote 6]
Respondents also argued, unsuccessfully, that their conduct was
immune from antitrust attack under the McCarran-Ferguson Act, 15
U.S.C. § 1011
et seq., that their prepaid medical plans
are not part of "trade or commerce" within the meaning of the
Sherman Act, and that the allegations of conspiracy were
insufficient. These claims are not before this Court.
[
Footnote 7]
See generally S.Rep. No. 93-1285, pp. 4-39 (1974)
(hereinafter 1974 Senate Report). In 1972, for example, Congress
passed § 1122 of the Social Security Act, 42 U.S.C. § 1320a-1,
which authorizes the Secretary of Health and Human Services to
enter into agreements with willing States, under which a state
agency would be designated as the appropriate body for approving
capital expenditures in the health care area. Under § 1122, federal
reimbursements under programs including Medicare and Medicaid do
not include the capital expenses of hospitals that have not
received agency approval.
In 1976, Missouri chose not to renew its agreement with the
Federal Government under § 1122, thus eliminating the previous
state program for approval of hospital construction. Brief for
Respondents 6, n. 6.
[
Footnote 8]
The Health Planning and Resources Development Amendments of 1979
(1979 Amendments), Pub.L. 96 79, § 103(c), 93 Stat. 595, added
another goal, "preserving and improving . . . competition in the
health service area." 42 U.S.C. § 300
l-2(a)(5) (1976 ed.,
Supp. IV).
[
Footnote 9]
The Act provides for reductions in various federal grants to
States that do not participate in the planning process. 42 U.S.C. §
300m(d).
[
Footnote 10]
As the 1974 Senate Report put it:
"The need for strengthened and coordinated planning for personal
health services is growing more apparent each day. In the view of
the Committee, the health care industry does not respond to classic
marketplace forces. The highly technical nature of medical services
together with the growth of third party reimbursement mechanisms
act to attenuate the usual forces influencing the behavior of
consumers with respect to personal health services. . . ."
"Investment in costly health care resources, such as hospital
beds, coronary care units, or radio isotope treatment centers, is
frequently made without regard to the existence of similar
facilities or equipment already operating in an area. Investment in
costly facilities and equipment not only results in capital
accumulation, but establishes an ongoing demand for payment to
support those services. . . ."
"A recently published study indicates that, by 1975, over 67,000
unneeded hospital beds will be in operation throughout the United
States."
"Hospital beds, though unused, contribute substantial additional
costs to the health care industry."
1974 Senate Report at 39.
[
Footnote 11]
The 1974 Senate Report stated:
"Widespread access and distribution problems exist with respect
to medical facilities and services. In many urban areas, hospitals,
clinics and other medical care institutions and services are
crowded into relatively tiny sectors, while large areas go poorly
served or completely unserved. Many rural communities are
completely without a physician or any other type of health care
service, while adjacent urban areas are oversupplied."
Ibid.
[
Footnote 12]
The Committee also sought to reduce the threat of domination of
HSA decisionmaking by providers with a personal stake in the
existing health care system. 1979 Senate Report at 57-59.
See
also Rosenblatt, Health Care Reform and Administrative Law: A
Structural Approach, 88 Yale L.J. 243, 304-330 (1978) (describing
problems of establishing consumer representation in HSA's).
[
Footnote 13]
In a new subsection, 42 U.S.C. § 300k-2(b)(1) (1976 ed., Supp.
IV), Congress made the finding that "the effect of competition on
decisions of providers respecting the supply of health services and
facilities is diminished," causing "duplication and excess supply
of certain health services and facilities." It added that, where
"competition appropriately allocates supply consistent with health
systems plans and State health plans," planning agencies should
"give priority . . . to actions which would strengthen the effect
of competition on the supply of such services." § 300k-2(b)(3).
But, for "health services, such as inpatient health services and
other institutional health services, for which competition does not
or will not appropriately allocate supply," agencies should "take
actions . . . to allocate the supply of such services." §
300k-3(b)(2).
[
Footnote 14]
Significantly, the MAHSA health systems plan only called on
insurers to create incentives to hold down the costs of care in
existing institutions, and made no mention of a role for insurers
in restraining unneeded hospital construction. The plan calls on
the
"reimbursement system [to] promote appropriate utilization of
hospital services, provide positive incentives for efficient
institutions, actively encourage utilization of less costly but
equal quality alternatives to inpatient care, and develop uniform
reimbursement programs."
App. 67a. But it then asserts that "[c]apital investment in
institutions [shall] be controlled by an appropriate review
agency."
Ibid.
[
Footnote 15]
See n 7,
supra. If it had done so, this case probably would not
have arisen. The state agency would have conditioned all hospital
construction on issuance of a "certificate of need."
See
supra at
452 U. S.
385-386. Parties pursuing hospital construction without
a certificate of need would now be subject to legal penalties. 42
U.S.C. § 300m-2(a)(4)(A) (1976 ed., Supp. IV).
Missouri subsequently has established a state agency and enacted
"certificate of need" legislation. Mo.Rev.Stat. § 197.300
et
seq. (Supp.1980).
[
Footnote 16]
Congress knew how to give an HSA policy greater legal effect.
Under 42 U.S.C. § 300
l-2 (e) (1976 ed., Supp. IV), HSA
approval -- sunject to review by the Secretary -- is required for
expenditures of funds under certain federal programs.
[
Footnote 17]
As noted
supra, at
452 U. S.
387-388, in 1979, competition was given a more prominent
place in the thinking of Congress.
[
Footnote 18]
Nevertheless, because Congress has remained convinced that
competition does not operate effectively in some parts of the
health care industry,
e.g., 42 U.S.C. § 300k-2(b) (1976
ed., Supp. IV), we emphasize that our holding does not foreclose
future claims of antitrust immunity in other factual contexts.
Although favoring a reversal in this case, the United States as
amicus curiae asserts that "there are some activities that
must, by implication, be immune from antitrust attack if HSAs and
State Agencies are to exercise their authorized powers." Brief for
United States as
Amicus Curiae 16, n. 11. Where, for
example, an HSA has expressly advocated a form of cost-saving
cooperation among providers, it may be that antitrust immunity is
"necessary to make the [NHPRDA] work."
Silver v. New York Stock
Exchange, 373 U. S. 341,
373 U. S. 357
(1963).
See 124 Cong.Rec. 34932 (1978) (Rep. Rogers) ("The
intent of Congress was that HSA's and providers who voluntarily
work with them in carrying out the HSA's statutory mandate should
not be subject to the antitrust laws. If they were, Public Law
93-641 simply could not be implemented"). Such a case would differ
substantially from the present one, where the conduct at issue is
not cooperation among providers, but an insurer's refusal to deal
with a provider that failed to heed the advice of an HSA.
[
Footnote 19]
This holding does not, of course, suggest anything about the
merits of the antitrust claim in this case. These matters remain to
be litigated on remand, where the court should give attention to
the particular economic context in which the alleged conspiracy and
"refusal to deal" took place.