Vertical Restraints and Powerful Health Insurers: Exclusionary Conduct Masquerading as Managed Care?

Document Type


Publication Date

Spring 1988




Duke University School of Law




Overt competition is a relative newcomer to the health care field-a field rarely even referred to as an industry a mere twenty-five years ago. In the early sixties most observers still considered commercial motives basically inapplicable to the delivery of medical services.' But perceptions have changed now that more than 11 percent of the gross national product is spent on the health sector of the economy, a development made possible primarily because insurance to pay for expensive treatment and technology has become more widely available. Delivering medical services is commonly considered big business now, and the same kinds of competitive and anticompetitive behavior that have always been found in commercial markets can be clearly observed in the health industry of the 1980's.2 Moreover, health insurers have evolved into major actors in the medical morality play, shaping policy as middlemen by "managing" the costs of care through vertical restraints on provider autonomy that might have seemed inconceivable to their cost-passthrough predecessors.3

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