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Competition Within the Physicians' Services Industry: Osteopaths and Allopaths

Published online by Cambridge University Press:  29 April 2021

Erwin A. Blackstone
Erwin A. Blackstone*
Affiliation:
Temple University
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Abstract

Within the physicians' services industry, doctors of osteopathy are the only "full line" competitors of medical doctors. Given the current interest in merger of the two schools of practice, this Article examines the benefits of having an independent osteopathic school. These benefits include: (1) reduction of the monopoly power of medical doctors in malpractice litigation, fee negotiations with third party payors and the formulation of health policy; (2) greater satisfaction of consumer desires; and (3) diversity and innovation in physicians' training and methods of practice. The Article concludes that society has an interest in discouraging merger of the two groups; osteopathy should be maintained as an independent school of practice. To this end, society should carefully consider the impact of legislation and regulatory policies that may have the unintended effect of eliminating osteopathy as an independent competitor.

Type
Articles
Information
American Journal of Law & Medicine , Volume 8 , Issue 2 , Summer 1982 , pp. 137 - 150
Copyright
Copyright © American Society of Law, Medicine and Ethics and Boston University 1982

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References

1 This article uses the term “allopaths” to refer to doctors of medicine (M.D.s). The term is used, as a matter of convenience, to distinguish conventional medical doctors from osteopaths. There is some dispute as to whether this usage is correct.. The term has been used to refer to conventional medical practice iri general. See e.g., Webster's Third New International Dictionary 57 (1976). On the other hand, allopath is understood by some to refer to a type of doctor different from a medical doctor. Thus, a medical dictionary includes under its definition of allopath: “2. Erroneously, a physician of the rational or regular school, as distinguished from eclectic or homeopathic practitioners.” Stedman's Medical Dictionary 45 (4th Lawyer's ed. 1976). The term is used in this article in the sense of the former definition.

2 Some factors contributing to this unresponsiveness are that: (1) health care services are generally paid for by third-party insurers; (2) consumers are often unable to evaluate and compare physicians’ services; (3) consumers are often inactive in creating demand; and (4) consumers’ traditional respect for the medical profession inhibits their questioning physicians’ judgment. Rosoff, , Antitrust Laws and the Health Care Industry: New Warriors into Old Battle, 23 St. Louis U.L.J. 446 (1979)Google Scholar; Note, Antitrust Implications of Chiropractic Peer Review Committees, 8 Am. J.L. & Med. 45, 61-62 (1982)Google Scholar. For an analysis of the workings of a medical market, see Blackstone, , Market Power and Resource Misallocation in Medicine: The Case of Neurosurgery, 3 J. Health, Pol., Pol'v & L. 345 (1978)Google Scholar.

3 Havighurst & Hackbarth, Competition and Health Care, Regulation, May-June 1980, at 39-43.

4 Havighurst & Hackbarth, supra note 2, at 46-48; Rosoff, supra note 1, at 447-48. See also Arizona v. Maricopa County Med. Soc'y, 102 S. Ct. 2466 (1982); Blue Shield of Va. v. McCready, 102 S. Ct. 2540 (1982); Union Labor Life Ins. Co. v. Pireno, 50 U.S.L.W. 4911 (U.S. June 28, 1982).

5 See, e.g., Havighurst, , Competition in Health Services: Overview, Issues and Answers, 34 Vand. L. Rev. 1117 (1981)Google Scholar.

6 Institute of Medicine, National Academy of Sciences, Costs of Education in the Health Professions 109 (1974).

7 Bloom, The D.O. Growing Pains, Med. World News, Oct. 27, 1980, at 42.

8 Blackstone, , The A.M.A. and the Osteopaths: A Study of the Power of Organized Medicine, 22 Antitrust Bull. 405 (1977)Google Scholar.

9 A study of osteopathic licensing notes: “As a practical matter, graduation from an A.O.A.-accredited college should satisfy the professional educational requirements of all states.” McDevitt, Osteopathic Licensing Summary, J. Am. Osteopathic A., Sept. 1975, at 79.

10 Institute of Medicine, supra note 6, at 110.

11 For example, the Board of Trustees of the Medical Society of New Jersey approved on October 17, 1976 a report recommending the admission of D.O.s. See New Jersey Doctors’ Notebook, 73 J. Med. Soc'y N.J. 1075, 1095-96 (1976).

12 The A.M.A. Board of Trustees has attempted to achieve unification of the two disciplines. Blackstone, supra note 8, at 422.

13 See infra notes 15-22 and accompanying text.

14 For example, in the professional team sports industry, “[n]ew leagues or financially troubled older ones often adopt playing and institutional innovations that eventually are adopted by more successful—and more conservative—competitors.” Noll, Major League Team Sports, in The Structure of American Industry 365, 395 (W. Adams ed. 1977).

15 See generally R. Posner, Economic Analysis of the Law ch. 9 (2d ed. 1977).

16 Id.

17 Id.

18 “The heart of our economic policy has long been faith in the value of competition.” Standard Oil Co. v. FTC, 340 U.S. 231, 248 (1951). Indeed, the Sherman Act assumes that competition is desirable in every market. See Note, supra note 1, at 61.

19 Rayack, The Physicians’ Services Industry in The Structure of American Industry 401, 407-09 (W. Adams ed. 1977).

20 See supra note 1.

21 Insurance companies generally compare submitted treatments and charges to those that are “usual, customary, and reasonable” for providers in a given area. See Pireno v. New York State Chiropractic Ass'n, 650 F.2d 387, 388 (2d Cir. 1981), aff'd sub. nom. Union Labor Life Ins. Co. v. Pireno, 50 U.S.L.W. 4911 (U.S. June 28, 1982).

22 Marmor, , Boyer, & Greenberg, , Medical Care and Procompetitive Reform, 34 Vand. L. Rev. 1003, 1004 (1981)Google Scholar.

23 Rosoff, supra note 1, at 448.

24 Id.

25 See Subcomm. on Health & The Environment of the House Comm. on Interstate & Foreign Commerce, 96th Cong., 2D Sess., Health Manpower Data Book 15 (Comm. Print 1980).

26 See id.

27 The New Eng. Board of Higher Educ, Recommendations for Regional Action for Optometric, Osteopathic, and Podiatric Education in New England 74 (1975).

28 See, e.g., Wolf v. Jane Phillips Episcopal Memorial Medical Center, 513 F.2d 684, 685 (10th Cir. 1975). In 1978, Senator Hathaway of Maine noted that osteopaths in Maine had difficulty obtaining staff privileges at allopathic hospitals despite their constituting a significant proportion of the state's primary physicians. Hearings on H.R. 10450 Before the Subcomm. on Healtth & the Environment of the House Comm. on Interstate & Foreign Commerce, 95th Cong., 2d Sess. 598 (1978) (letter written by Senator Hathaway).

29 Although osteopathy emphasizes strongly primary care, it nevertheless provides a full range of medical services. See Blackstone, supra note 8 and accompanying text.

30 American Osteopathic Ass'n, Preliminary Draft Report of the Task Force on Graduate Osteopathic Medical Education 29 (1980) [hereinafter cited as Preliminary Draft Report]. AS of July 1980, there were 1421 approved residency positions, far below the number likely to be necessary in the near future. Id. at 34.

31 Id. at 27; Northup, A Word for the Little Guy, J. Am. Osteopathic A., Jan. 1977, at 323.

32 As of July 1980, only six osteopathic hospitals had more than 400 beds. Preliminary Draft Report, supra note 30, at app. 4, 1-3.

33 Part 1 Health Planning & Resources Dev. Amendments of 1978: Hearings on H.R. 10460 Before the Subcomm. on Health & the Environment of the House Comm. on Interstate & Foreign Commerce, 95th Cong., 2d Sess. 586 (1978) [hereinafter cited as HPRDA of 1978].

34 Id.

35 42 U.S.C. § 300k-300t (Supp. IV 1980).

36 See Havighurst & Hackbarth, supra note 2, at 39-43.

37 See HPRDA of 1978, supra note 33, at 625-27 (letter from J. Miller, Chairman of the Board of Directors of the Grand Rapids Osteopathic Hospital to Judge F. Grimm).

38 Id.

39 Id.

40 Id.

41 1979 Amendments to the National Health Planning and Resource Development Act, Pub. L. No. 96-79, 93 Stat. 618 (1979).

42 Id.

43 Id.

44 In Michigan, for example, state law empowers local health planning agencies to eliminate “surplus” hospital beds. See Holweiko, What a Crackdown on “Surplus” Beds Can Do to Doctors, Med. Econ., Mar. 3, 1980, at 25, 36. In 1981, the Michigan Health Systems Agency threatened closure of an osteopathic obstetrical unit. Id. See also McGuire, BOH Obstetrics Shouldn't Be Cut, Mich. Osteopathic J., Sept. 1981, at 37.

45 Project, The Medical Malpractice Threat: A Study of Defensive Medicine, 1971 Duke L.J. 939, 948.

46 See Morrill v. Komasinski, 256 Wis. 417, 41 N.W.2d 620 (1950) (plaintiff could find no M.D. to testify against M.D. defendant). See also infra notes 52-53 and accompanying text.

47 See Markus, , Conspiracy of Silence, 14 Clev.-Mar. L. Rev. 521; (1965)Google Scholar D. Harney, Medical Malpractice 193 (1973) (“It has been held to be a matter of common knowledge that a plaintiff in a medical malpractice action often is unable to find a medical expert willing to testify against a fellow physician.… .”); Faulkner v. Pezeshki, 44 Ohio App. 2d 186, 193, 337 N.E.2d 158, 164 (1975) (“Locating an expert to testify for the plaintiff in a malpractice case is known to be a very difficult task, mainly because in most cases, one doctor is reluctant and unwilling to testify against another doctor.”).

48 Expert medical testimony is generally required in all malpractice cases because negligence in the diagnosis and treatment of the patient would not be obvious to a layman. Musachia v. Terry, 140 So. 2d 605, 607 (Fla. Dist. Ct. App. 1962), aff'd, 190 So. 2d 147 (1966).

49 See Eisenberg, Malpractice Witnesses From Abroad: The New “Hired Guns”?, Med. Econ., May 1, 1978, at 142, 149.

50 Creasey v. Hogan, 292 Or. 154, 637 P.2d 114 (1981); Lisi v. Workmen's Compensation Appeal Board, 17 Pa. Commw. 294, 296, 331 A.2d 253, 254 (1975) (“The fact that Dr. Pettenelli is an osteopath, and not a cardiologist, may affect the weight or credibility of his testimony, but it does not affect its competency.”); Morrill v. Komasinski, 256 Wis. 417, 41 N.W.2d 620 (1950); see generally Annot., 46 A.L.R.3d 275 (1972).

51 Morrill v. Komasinski, 256 Wis. at 422, 41 N.W.2d at 622-23.

52 Id.

53 It is ironic, perhaps, that the benefits that result from osteopaths’ ability to testify against allopaths in malpractice cases depends on similarities between the two schools, whereas many other benefits discussed in this Article depend on differences between them.

54 42 U.S.C. § 1396 (1976).

55 42 U.S.C. § 1396a(30) (Supp. 1982).

56 42 U.S.C. § 1396a(37) (Supp. 1982); Pharmacist Political Action Comm. of Md. v. Harris, 502 F. Supp. 1235 (D. Md. 1980) (maximum allowable reimbursement rates upheld).

57 See Reilly, , State Problems in Government and Medicine, 74 J. Med. Soc'y N.J. 611, 612 (1977)Google Scholar.

58 New Jersey Doctor's Notebook, 72 J. Med. Soc'y N.J. 950 (1975)Google Scholar. See also Reilly, supra note 57, at 612.

59 N.Y. Times, Aug. 8, 1975, at 60, col. 1.

60 Health Services for the Aged Under the Social Security Insurance System: Hearings on H.R. 4222 Before the House Comm. on Ways & Means, 87th Cong., 1st Sess. 1309 (1961).

61 Id. at 2224.

62 42 U.S.C. § 1320c (1976).

63 Selected Medical Issues: Hearings Before the Subcomm. on Health of the House Comm. on Ways & Means, 94th Cong., 1st Sess. 124-25 (1975).

64 Id. at 134-35.

65 Health Insurance for the Unemployed and Related Legislation: Hearings Before the Subcomm. on Health of the House Comm. on Ways & Means, 94th Cong., 1st Sess. 26-28 (1975).

66 Id. at 274.

67 See supra notes 41-43 and accompanying text.

68 See supra note 1 and sources cited therein; see also Marmor, Boyer & Greenberg, supra note 22, at 1004.

69 Hesbacher, , Schein, & Leopold, , Psychiatric Illness Detection: A Comparison of Osteopaths and M.D.s in Private Family Practice, 9 Soc. Sci. & Med. 461 (1975)Google Scholar.

70 Faverman, Task Force on Graduate Osteopathic Medical Education: Practice Distribution by Community Size, The D.O., Nov. 1979, a t 69, reprinted in American Osteopathic Ass'n, Preliminary Draft Report of the Task Force on Graduate Osteopathic Medical Education (1980).

71 See Hesbacher, Schein & Leopold, supra note 69.

72 See Blackstone, , Alisallocation of Medical Resources: The Problem of Excessive Surgery, 22 Pub. Pol'y 329, 330-31 (1974)Google Scholar.

73 For example, the Philadelphia College of Osteopathic Medicine requires 42 weeks of primary and ambulatory clinical experience. Editorial comment, J. Am. Osteopathic A., Jan. 1976, at 472-73.

74 Preliminary Draft Report, supra note 30, at 26. Osteopaths also have responded to patients’ inability to obtain physicians’ services in the home. A survey of Philadelphia College of Osteopathic Medicine alumni, showed that 43 percent of the college's alumni made house calls. 42 Dig. Philadelphia C. Osteopathic Med. 5 (1980). See also Hesbacher, Schein & Leopold, supra note 69.

75 Reilly, , Client Choices among Osteopaths and Ordinary Physicians in a Michigan Community, 14B Soc. Sci. & Med. 111, 119 (1980)Google Scholar.

76 Osteopathy's emphasis upon treating the whole patient and use of manipulative therapy probably satisfies the demands of many who would otherwise turn to other sources.

77 P. Feldstein, Health Care Economics 341-45 (1979).

78 Id. at 343.

79 Id.

80 Manual for Intern Training, J. Am. Osteopathic A., Sept. 1975, at 102.

81 Proud D.O.s, Buoyed by Growth, Affirm Medical Independence, Med. World News, Aug. 7, 1978, at 20-21.

82 Forgotson, , Roemer, & Newman, , Licensure of Physicians, 1967 Wash. U.L.Q. 249, 267-93Google Scholar.

83 Id. at 293.

84 Id.

85 Storey, , Mandatory Continuing Medical Education, 298 New Eng. J. Med. 1417 (1978)Google Scholar.

86 U.S. Dept. of Health, Education and Welfare, Stat. Regulation of Health Manpower 172-74 (1977). Other board members would be public representatives. For example, in 11 states, the public had at least one board member. Id.

87 See California Osteopaths, 34 Med. Care Rev. 343, 344 (1980). See also California Osteopaths, 37 Med. Care Rev. 565, 566 (1980).

88 See supra notes 35-44 and accompanying text.

89 Havighurst & Hackbarth, supra note 2, at 40-41.