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June 21, 1979

UNITED STATES of America, Plaintiff,

The opinion of the court was delivered by: DUFFY

This is an action brought by the United States of America against the American Society of Anesthesiologists (hereinafter referred to as "ASA") charging that organization with violating Sections 1 and 4 of the Sherman Act, 15 U.S.C. §§ 1 and 4. The government alleges that the ASA combined and conspired with its component societies, individual anesthesiologists and others to engage in a restraint of interstate commerce. This conspiracy allegedly consisted of an agreement to raise, fix, stabilize and maintain fees charged by anesthesiologists for anesthesia services. The government contends that the adoption, publication and circulation of relative value guides is a Per se violation of the antitrust laws and as such should be enjoined. The ASA denies that it engaged in any conspiracy and maintains that the drafting, adoption and publication of relative value guides constitutes a proper and reasonable service to its members, government agencies and health insurance carriers.


The ASA is a tax exempt membership corporation organized and existing under the laws of the State of New York with its only office in Park Ridge, Illinois. Most of its members are physicians engaged in the practice of anesthesiology, however, there are some non-physician members.

 In 1975 ASA membership included:

(a) 9,463 "active members," who are licensed physicians or physicians on active duty in the Armed Forces engaged in the practice of, or otherwise especially interested in, the medical specialty of anesthesiology;
(b) 300 "affiliate members," who are physicians not engaged in the clinical practice of anesthesiology; scientists, not physicians, who are in the service of the United States Government; and physicians who are non-residents of the United States;
(c) 2,388 "resident members," who are physicians in full-time training as interns or residents in anesthesiology;
(d) 1,300 members in other categories including "honorary members," who have attained outstanding eminence in anesthesiology; "life members," who are Past-Presidents of ASA; and "retired members," who are physicians who have been active members for ten or more years and have retired from professional activity.

 ASA component societies are organizations of anesthesiologists, chartered by ASA, but independent in the sense that they determine their own policies unless such policies are specifically required by ASA By-Laws. ASA has active component societies in 48 states, the District of Columbia and the Commonwealth of Puerto Rico. Some of these component societies are themselves subdivided based upon geographic area. For example, The New York State Society of Anesthesiologists is comprised of eight "District Societies."

 Active members and certain affiliate members become such by joining component societies. A substantial number of ASA members, however, are not members of component societies.

 Under its By-Laws, ASA is governed and its policies are determined by a House of Delegates, most of whom are elected by the voting members or the legislative bodies of the component societies. ASA's business affairs are controlled (subject to override by the House of Delegates) by a Board of Directors whose members are elected by ASA's active and life members in 28 "Director Districts", 11 of which are geographically co-extensive with the component societies. The House of Delegates meets annually and, among other items of business, elects officers, including a President, President-Elect, and First Vice President. A Secretary and a Treasurer are elected by the House of Delegates for two-year terms beginning in odd numbered years.

 Anesthesiology is a medical specialty which deals with the management of procedures for rendering a patient insensible to pain during surgical, obstetrical and certain other medical procedures; the support of like functions under the stress of anesthetic and surgical manipulation; the clinical management of the patient unconscious from whatever cause; the management of problems in cardiac and respiratory resuscitation; the application of specific methods of inhalation therapy; and the clinical management of various fluid, electrolyte and metabolic disturbances. The specialty had a somewhat stop and start development; although important anesthetic drugs were discovered in the nineteenth century, the techniques and arts of anesthesia did not advance until approximately 1928. As a result of this failure to develop new anesthetic drugs and techniques, surgical procedures were also limited. Prior to 1928 the administration of anesthesia was regarded as a relatively simple procedure that did not necessarily require the expertise of a medical doctor. For the most part, nurses and technicians were utilized to administer anesthetic drugs.

 Development advanced significantly in 1928 when Dr. Ralph Waters established the first department of anesthesia at the University of Wisconsin. Other medical establishments followed suit and in 1939 the American Board of Anesthesiology was created to test and certify the competence of physicians in this newly-developed specialty. It was World War II, however, that provided the impetus for the widespread development of the specialty. The government required that physicians be utilized to administer anesthesia wherever possible and, accordingly, young doctors were given crash courses in the area. As a result of this experience, surgeons began to recognize the value of physician-administered anesthesia and demand their expertise when they returned to civilian life. In addition, many of the young physicians who practiced anesthesia during the war decided to pursue that specialty. This new interest spurred efforts to establish additional residency training programs and to recruit more doctors into the field.

 When the specialty was still young, it was common for anesthesiologists to work as salaried employees of the hospitals in which they practiced their profession. Anesthesia was considered part of the hospital's services and was billed to the patients as such. Anesthesiologists were dissatisfied with this manner of practice because it impaired their status in the medical community and their recognition by the community at large. Additionally, the level of compensation was below that of other specialists, a factor which contributed to discouraging new entrants into the field.

 By 1957 the salaried anesthesiologist had become the exception. Anesthesiologists began to establish independent practices and were able to obtain hospital privileges upon the same terms and conditions as other clinicians. Today, between 80 and 90% Of those ASA members who are actively engaged in the practice of anesthesiology derive income from fees paid by or on behalf of individual patients. Although there are no authoritative figures on the income of anesthesiologists, it has been estimated that ASA members realize annual revenues in excess of $ 675 million. To place this sum in perspective it should be noted that available figures indicate that in 1975 there were approximately 13,370 physicians in the United States engaged in anesthesiology and nearly all were ASA members.

 The principal activity of most anesthesiologists who are in the clinical practice of medicine is in connection with the performance of surgery in a hospital. Ordinarily, the patient about to undergo surgery does not choose his anesthesiologist. That decision is usually made by the surgeon or assigned to the patient's case by the operating room supervisor or head of the anesthesiology department. It is not uncommon for a patient to have his first contact with the anesthesiologist just prior to being brought into the operating room for surgery.

 It is perhaps a result of this minimal contact that the anesthesiologist and his patient rarely discuss fees prior to surgery. Even where there is a significant presurgical meeting, however, it appears that patients seldom inquire regarding fees. Indeed, the patient usually learns the amount of the fee when the bill is rendered.

 It is common practice for a group of anesthesiologists, organized as a single business entity, to carry on all of the anesthesia practice in a single hospital. This does not necessarily mean that a non-group member could not practice in that hospital if a request were made. There are also some hospitals where more than one group practices in the same hospital or where individual anesthesiologists practice in the same hospital. Even where group practices exist, it is not uncommon for fees to vary among members of the group.


 For the most part, anesthesia fees are covered by health insurance. Health insurance carriers sell insurance policies to individuals or groups of individuals. These policies, in consideration of premiums paid by or on behalf of the insured, cover the expense of health services either by way of reimbursement of payments made by the insured, or by direct payment to the provider of the health service, depending on the terms of the policy. Companies engaged in the business of selling health insurance policies regularly receive premium payments made across state lines and make payments to providers of health services, to the holders of policies and to others across state lines in a regular flow of interstate commerce. Where health insurance policies do not cover the entire cost of the anesthesiologist's services, the patient may be responsible for the payment of the difference between the amount billed by the anesthesiologist and the amount paid by the insurer. In fiscal 1974, private health insurance carriers made payments of approximately $ 7,081,000,000 for physicians' services.

 Public health insurance is also provided to certain persons pursuant to the "Health Insurance for the Aged (Act)," 42 U.S.C. § 1395 et seq., commonly known as the "Medicare" Program. Some 24 million people pay monthly premiums to the Bureau of Health Insurance of the Social Security Administration of the Department of Health, Education and Welfare. Such premiums, together with additional Federal funds, are used to pay charges for health services provided to those covered by the Medicare Program and for the costs of administering the program. Medicare generally covers 80 percent of expenditures in excess of $ 60 per calendar year for physician's services. In 1975, Medicare benefits in excess of $ 11,322,000,000 were paid on behalf of nearly 13 million people. Local health insurance carriers, sometimes referred to as "intermediaries" service the Medicare program as agents for the United States Government pursuant to regulations and instructions issued through and administered by the Bureau of Health Insurance.

 Medicaid, formerly known as the "Grants to States for Medical Assistance," 42 U.S.C. § 1396 et seq., is another government reimbursement program. It is jointly financed by the Federal, State and local governments and administered by State governments in accordance with Federal law. The program is voluntary with each individual state and every state but Arizona has Medicaid programs. Medicaid pays for medical expenses, including reasonable physicians' fees, of needy and low-income people who are aged, blind, disabled, under 21, or members of families with dependent children. In fiscal 1974, Medicaid payments totalled $ 11,218,000,000 of which the Federal government paid $ 5,824,000,000. In 1975, Medicaid paid medical charges for more than 22 million people.

 Anesthesiologists, including those who are members of ASA, are among the physicians whose fees are covered by the Medicare and Medicaid Programs. Medicare reimbursements involve substantial payments to anesthesiologists made by the United States Treasury across state lines, through insurance carriers acting as intermediaries. Pursuant to the Medicaid program, substantial payments are also made to anesthesiologists located throughout the United States by state governments from funds received across state lines, from the U.S. Treasury.

 In addition to the reimbursements outlined herein, various state programs cover the cost of medical services to the individual. These programs include Workmen's Compensation and Crippled Children's Programs.

 As noted above, a substantial portion of the fees charged to patients by anesthesiologists, including ASA members, is covered in whole or part by health insurance carriers pursuant to health insurance policies paid for by or on behalf of such patients or by some governmental health program. Fees charged by members of ASA for their services to patients have an effect upon the cost (and consequently the premiums) of such ...

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