Supreme Court rules that antitrust laws apply to hospitals' treatment of doctors

May 29, 1991|By Lyle Denniston | Lyle Denniston,Washington Bureau of The Sun

WASHINGTON -- The Supreme Court, in a 5-4 ruling likely to have a major impact on the medical profession, ruled yesterday that hospitals and clinics may be sued for antitrust damages for threatening the practice of a doctor by taking away or denying staff privileges.

In the California case, the court declared that a boycott of a doctor may harm competition within that physician's field of specialty and that such a boycott is enough to justify a federal antitrust lawsuit.

A hospital or clinic "peer review" procedure -- used to police doctors' ethical conduct -- can become a violation of the Sherman Antitrust Act, the majority said, when it is misused to shut out a doctor from offering his or her services to patients.

The ruling cleared the way for trial of an antitrust lawsuit against a Los Angeles hospital by Dr. Simon J. Pinhas, an eye surgeon with an international reputation for special skills in cornea transplants and cataract removals.

Dr. Pinhas objected to a policy at Midway Hospital Medical Center of requiring an assistant surgeon to assist in eye operations. He contended that he did not need the help and objected to the added cost to the patient.

The medical staff refused to eliminate that requirement and at first offered to pay Dr. Pinhas a $60,000 added fee, which he considered to be a "sham" since he would do nothing to get the money. After he refused that offer, the hospital began an investigation by its peer review panel of possible ethical misconduct by the surgeon -- leading ultimately to a six-month probation.

He sued, claiming an antitrust violation because the hospital action, which it publicized with other hospitals, shut him off from staff privileges throughout California. The hospital contended that there was no link between what it did and business activity in other states, so there could be no antitrust lawsuit. Lower courts rejected that claim, and so did the Supreme Court.

The case was Summit Health vs. Pinhas (No. 89-1679).

In another business-related action yesterday, the Supreme Court cleared the way for creditors of now-bankrupt Pan American Airways to repossess 29 of its jet planes, if the airline does not promptly pay $33 million in obligations it owes for leasing those jets.

Pan Am had contended that, by filing for bankruptcy, it gained the right to avoid immediate payoff of those obligations, since the aircraft were already in its fleet when it filed for bankruptcy in January. Lower courts rejected that argument, saying that bankruptcy law allows those who have leased equipment to airlines -- in the past as well as after bankruptcy -- to collect their obligations or repossess the leased items.

The case was Pan American vs. 1100 Parties (No. 90-1530).

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