FOR IMMEDIATE RELEASE                                          AT
WEDNESDAY, SEPTEMBER 13, 1995                      (202) 616-2771
                                               TDD (202) 514-1888


JUSTICE DEPARTMENT TAKES UNPRECEDENTED ACTION TO STOP DOCTORS AND
  HOSPITALS IN CONNECTICUT, MISSOURI FROM BLOCKING MANAGED CARE
     

     WASHINGTON, D.C. -- Doctors and hospitals in two states were
charged today with unlawfully trying to keep out lower-priced
managed health care plans and other competitors in first of a
kind lawsuits by the Justice Department's Antitrust Division. 
The lawsuits, and proposed settlements, involved medical
providers in Danbury, Connecticut, and St. Joseph, Missouri.
     The Department's Antitrust Division filed two separate
lawsuits charging that in each instance a monopoly hospital had
joined with nearly every local physician to dictate higher priced
terms and conditions to managed care health plans in its area.
     At the same time, the Department filed proposed settlements
designed to permit doctors and hospitals to work together in ways
that can reduce health care costs while at the same time
preventing them from limiting competition and driving up costs. 
The proposed settlements, agreed to by the defendants, would
resolve the lawsuits if approved by the court.  
     Anne K. Bingaman, Assistant Attorney General in charge of
the Antitrust Division, said, "These lawsuits signal that we will
not tolerate collusive conduct that drives up health care costs.
However, we remain flexible and willing to consider innovative
arrangements that preserve competition and may reduce the cost of
medical care."
     In Danbury, the Department of Justice worked with the
Connecticut Attorney General's office in investigating and filing
the case.  Assistant Attorney General Bingaman praised the joint
effort as "another example of how coordinated law enforcement
uses taxpayer dollars effectively and protects consumers."
     The Danbury complaint, filed in U.S. District Court in
Connecticut, charged that the Danbury Hospital, which is the only
acute care hospital in its area, formed an alliance during 1993
and 1994 with virtually all of the doctors on its medical staff
to delay and deter the continued development of managed care
plans in and around Danbury.  The Department alleged the
conspiracy took place from May 1994 through August 1995.
     According to the complaint, the hospital also worked with
the doctors to limit the size and mix of its medical staff in
order to limit competition among local doctors.  
     Finally, the complaint charged that the hospital abused its
monopoly position in in-patient services to unlawfully maintain
its profits and to gain an unreasonable advantage in markets for
outpatient services.  Named as defendants are: the hospital, the
physicians' group, called the Danbury Area IPA Inc., and
HealthCare Partners Inc., the physician-hospital organization in
which each of them owned a 50 percent share.
     The Missouri case is similar, the Department said.  The
Department alleged the conspiracy took place from April 1986
through June 1995.  The complaint, filed in U.S. District Court
in Kansas City, Missouri, charged that in 1986, about 85 percent
of the doctors in Buchanan County, Missouri, formed a group
called St. Joseph Physicians Inc. to prevent or delay the
development of managed care in the area.  In furtherance of this
plan, in 1990 St. Joseph Physicians Inc. joined with the only
local hospital, Heartland Health System Inc., to form Health
Choice of Northwest Missouri Inc., the Department said.  The
complaint charged that since Health Choice was formed several
managed care plans have attempted to enter Buchanan County
independent of Health Choice, but none has succeeded.
     Bingaman pointed out that while the settlements prohibit the
anticompetitive behavior described in the complaints, they also
indicate ways in which doctors can form their own managed care
programs without hurting competition.  
     "Doctors in many areas have expressed the desire to form
their own managed care plans and these proposed settlements make
clear that they may do so without violating the antitrust laws,"
said Bingaman.
     As required by the Antitrust Procedures and Penalties Act,
the proposed consent decree will be published in the Federal
Register, along with the Department's competitive impact
statements.  Any person may submit written comments concerning
the proposed decrees during a 60-day comment period to Gail
Kursh, Chief, Professions & Intellectual Property Section/Health
Care Task Force, Antitrust Division, U.S. Department of Justice,
600 E. Street, N.W., Room 9300, Washington, D.C. 20530.  
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