Sherman Antitrust Act Violations and Lawsuit Recommendation

Healthcare litigation can take on many forms. All parties involved often experience significant costs and challenges as health law litigation can be complex. Therefore, when possible, alternatives should be found to determine a mutual resolution. This report will investigate various means to legally resolve a scenario of a surgeon suing his previous place of employment, citing a sham peer review process, but facing allegations of antitrust violations in return.

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Arbitration is an out-of-court process where both parties agree to be judged by a neutral third party known as the arbitrator. The arbitrator or panel of them would examine evidence and make a decision which the involved parties must agree to accept as it is binding. It is less formal than a court setting but follows many similar principles to ensure a partial judgment. It is commonly used in labor disputes and other related workplace cases. It is beneficial since it is both time and cost-effective, allowing to reach a quick decision confidentially without accruing high legal expenses. However, the speed of the process and the fact it is not a court case, many rules on evidence, discovery, and reasonable doubt do not apply in this process (Menkel-Meadow, 2015).


Mediation is a more peaceful and neutral process than arbitration, where a third party attempts to resolve the conflict between the plaintiff and the defendant. Mediation utilizes a variety of techniques such as psychology, negotiation, and communication building. Mediation is considered a form of alternative dispute resolution and remains significantly informal in most cases. Mediation is a non-binding, consensual process that can lead to other binding agreements such as a settlement or the suit being dropped.

The benefits of mediation are its lost cost, privacy, speed, ability to negotiate, and providing a pre-emptive platform to test the strengths of one’s case before trial. However, the negative aspects are that it has to be fully mutual, with both parties willing to compromise and cooperate to agree to a resolution, which is rare in hostile lawsuits (Menkel-Meadow, 2015).


An out-of-court settlement is an agreement between litigants to settle the matter with an agreed-upon decision and, usually, compensation for the plaintiff. In turn, the matter is sealed, and commonly parties sign a non-disclosure agreement. Settlements are a quick method to resolve an issue that parties know will go a particular way in court, thus saving significant costs on legal fees and other issues, even in consideration that compensation will have to be paid. The negative aspect, in this case, is primarily for the plaintiff who may receive a substantially lower amount than in court, but the defendant may also lose out by settling a case that they could have potentially won (Glater, 2008).


The court option includes taking the case to trial, commonly before a jury using the full range of legal power and evidence to demonstrate the merits of the case. Court cases are more expensive, can create public pressure on the organization, and lead to unfavorable outcomes to both or either of the parties. However, the advantages are is that it allows for an impartial decision, provides full public disclosure, sets potential precedents, and indicates the seriousness that the parties are confident in their stance (Glater, 2008).


These types of suits of physicians being denied staff privileges are rather common, alleging the violations of the Sherman Antitrust Act. The Supreme Court has established the precedent Health Care Quality Improvement Act (HCQIA) and the rule of reason for analysis in staff privilege litigation, with plaintiffs now required to make the threshold liability determination. Furthermore, the HCQIA greatly improved the peer review process and criteria, making it much more difficult to disprove (Neff, 1988).

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Peer reviews are generally accepted methods of evaluation in hospitals, and the attempt of the neurosurgeon to imply that he was a victim of malicious peer review would be difficult to prove without evidence. A precedent was set with Benson v. St. Joseph Regional Health Center (575 F.3d 542) which determined the plaintiff could not present evidence suggesting there was any restriction on his trade or competition or having any effect on quantity, quality, or cost of healthcare after being removed from staff privilege. In recent years, the courts mostly follow suit of the Benson case in any litigation brought forward by physicians aggrieved by their hospital, dismissing or resolving it before the trial stage begins (Sumner, 2009).

However, another case in Texas regarding Dr. Gomez, a cardiothoracic surgeon, made it to trial and gained publicity, which was damaging to the hospital. It was revealed that since Dr. Gomez was leaving the job to work for the competition, the hospital used the peer review process to smear his reputation in the attempt to hold on to a highly profitable vital market share of high margin surgeries since doctors often take many clients with them when they leave (Sixel, 2017).

The recommendation will vary dependent on the unique facts of the case. Considering that the physician left work at another facility and became chair of the department, indicates the motive for the hospital to use the peer-review process to their advantage. If there is any indication of that, it would be recommended to negotiate a settlement to avoid bad publicity and resolve the issue quickly. However, if the peer review process was transparent, with appropriate evidence supporting staff and patient claims of overcharging for personal benefit, it may be possible to litigate in the hopes that the court will rule in favor of the hospital. However, a pattern of this behavior and the violation of antitrust laws must be proven without reasonable doubt as the neurosurgeon has a compelling case.


Glater, J. D. (2008). Study finds settling is better than going to trial. The New York Times. Web.

Menkel-Meadow, C. (2015). Mediation, arbitration, and alternative dispute resolution (ADR). Web.

Neff, J. (1988). Physician staff privilege cases: Antitrust liability and the health care quality improvement act. William and Mary Law Review, 29(3), 609-633.

Sixel, L.M. (2017). Doctor’s lawsuit against hospital turns on care v. market share. Houston Chronicle. Web.

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Sumner, R. P. (2009). Are you aware of antitrust issues in medical staff cases? Web.

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