In the first physician antitrust case involving financial restitution, Puerto Rican physicians in October settled Federal Trade Commission charges that they conspired to fix prices and engaged in an illegal strike.
The College of Physicians-Surgeons of Puerto Rico was fined $300,000 and this month made the first of two $150,000 payments to a catastrophic public health fund. College membership is mandatory for the island's 8,400 physicians.
According to president Enrique Vazquez Quintana, M.D., the college is upset in general with government healthcare reforms and specifically with a new Medicaid-like, managed-care program for Puerto Rico's indigent. The recent reforms have privatized all public healthcare.
The college became actively involved in the reform debate after a group of physicians from central Puerto Rico asked for assistance negotiating managed-care contracts. When the government refused to let the college observe and participate in negotiations, college members voted for a boycott.
Although the college was created by the government, the government has not allowed its members to play a significant part in shaping the new reforms, Vazquez Quintana says. That omission, in part, led to the recent boycott.
On October 30, 1996, physicians across Puerto Rico shut their offices to routine appointments. The boycott lasted eight days.
"We don't call this a strike because we don't have an employer-employee relationship," Vazquez Quintana says. "We protested against the government, not against the insurance companies.
"We never obstructed commerce and we never discussed money. As a college, we were not bargaining. We wanted to be with [physicians] in negotiations to explain the merits or disadvantages of getting involved in the managed-care contracts." The managed-care program is optional and physicians can choose not to accept participating patients.
General surgeon Olga Rodriguez, M.D., closed her office for three days. "I didn't lose patients and nobody complained," she says. "Most of our patients understand our problem."
The Puerto Rico attorney general and the FTC, however, did not. In fact, a formal FTC investigation concluded that the case was a clear-cut example of an illegal strike. "This was a dramatic lessening of healthcare, and certainly antitrust laws don't [condone] that," says Michael Antalics, assistant director for nonmerger litigation in the FTC's bureau of competition.
According to the FTC complaint, the college and the three large physician groups that actively supported the boycott engaged in unfair methods of competition and violated antitrust laws. Despite the college's claims, Antalics says the boycott clearly was economically motivated.
"What happened was the physician groups and the college decided to use their collective economic muscle to try to stop reform and extract higher prices," he says. "The physicians were dissatisfied with capitation, they wanted to carve out certain services and they wanted to collectively negotiate the agreement. This was a pretty egregious example of physicians denying healthcare."
The consent order to settle was signed Oct. 2. Under the settlement, the college and the physician groups are prohibited from participating in future boycotts and jointly negotiating contracts. The $300,000 restitution will be paid to a catastrophic fund administered by the Puerto Rico Department of Health. Each physician will contribute $37.50 to the fund, according to Vazquez Quintana.
The fine was assessed, Antalics says, because the physicians needed to repay capitated payments received for the days of the boycott.