Blue Cross v. Marshfield

Blue Cross/Blue Shield v. Marshfield
Michael Stapleton
Micker8@aol.com

Content

Introduction………………………………………………………………….page 2
Jury and Government Findings……………………………………………...page 2
Concepts Relevant to this Case……………………………………………...page 3
Conclusion…………………………………………………………………..page 4
References…………………………………………………………………...page 5
Blue Cross v. Marshfield

Introduction The Marshfield clinic is a health care system founded in 1916 comprised largely in Wisconsin (Marshfieldclinic.org, 2012). It has 2 hospitals, 53 community care centers, and has about 800 physicians in more than 80 medical specialties and subspecialties-from cardiology, to neurology, to dentistry - provide care at over 50 locations throughout northern, central and western Wisconsin. In 1995, Blue Cross and Blue Shield United of Wisconsin brought a suit against the Marshfield Clinic and Security alleging violations of sections 1 and 2 of the Sherman Act, a federal antitrust statute (Meili & Sarskas, 1996). The Sherman Act of 1890 sections 1 and 2 outlawed restraints of trade (for example, collusive price-fixing and dividing up markets) as well as monopolization (McConnell, Brue, & Flynn, 2012). It argued that the Marshfield clinic used its monopoly power and engaged in collusion with competitors to charge supra-competitive prices for health care services in the region.
Jury and Government Findings In December of 1994, a jury found Marshfield clinic in violation of the Sherman Law and awarded Blue Cross and Blue Shield $48 million on the grounds that it had engaged in anticompetitive, monopolistic practices to restrict the health care market in northern and central Wisconsin (Lutes & Vanderbilt, 1995). Upon appeal, however, the amount of the award was reduced to $17 million and in a written opinion, the court described the damages awarded by the