The Supreme Court, ending a major antitrust controversy, yesterday upheld Federal Trade Commission orders letting doctors and dentists advertise without interference from their professional associations.
The FTC order also restrains the American Medical Association from obstructing health maintenance organizations and other prepaid medical plans that differ from the conventional fee-for-service arrangement.
A 4-to-4 vote of the court concluded the seven-year-old case, which began when the commission found an antitrust conspiracy between the AMA and its connected local associations to suppress competition by discouraging advertising and alternative fee schemes. FTC followed up its 1975 charges with a cease-and-desist order, then also moved against American Dental Association advertising restrictions. The ADA agreed to be bound by the outcome of yesterday's case.
The 1979 FTC order allows professional associations to police false or deceptive advertising.
The tie vote--which occurred when Justice Harry A. Blackmun disqualified himself, possibly because of longtime affiliations with the Mayo Clinic--automatically upheld a sweeping decision by the Second U.S. Circuit Court of Appeals in favor of the FTC. But it did not settle the larger question in the case: whether the controversial regulatory commission has jurisdiction over professional associations.
The question could return to the court, but Congress may resolve it first. A bill introduced in the Senate in December would remove FTC jurisdiction over all professions.
Advertising by professionals--lawyers, doctors, dentists, engineers and others--was largely banned by professional codes of ethics until a series of landmark Supreme Court rulings in the 1970s extended the First Amendment's free speech guarantees to protect such advertising. Earlier this term, the court gave professionals even greater leeway, striking down bar restrictions on the content of lawyer advertising.
Lawyers have taken advantage of the new freedom in significant numbers. But doctors and dentists have not.
Part of the reason, the FTC has maintained, is pressure from national and local medical associations, and codes of ethics. The AMA argued in yesterday's case that the pressure no longer exists, that it long ago stopped the practices the FTC alleged in its administrative action and in its 1979 cease-and-desist order.
But just this month the FTC issued and then settled a complaint against the Broward County (Fla.) Medical Association for using ethical restraints against doctor advertising.
The fee portion of the FTC action against the AMA stemmed from allegations that the medical assocation sought to inhibit, through its code of ethics, the growth of alternative means of medical service, contractual agreements between doctors and prepaid plans. The AMA disputed this complaint as well.
Government lawyers said yesterday that the 1979 order was not specifically directed at local medical associations, although the same principles apply to them. They said the Supreme Court action in AMA vs. FTC should reassure doctors and dentists that they are free to advertise without undue regulation by associations, which are--at least for the time being--subject to antitrust sanctions as a result of yesterday's action.
Both sides expressed some disappointment about the tie vote.
"We're sort of stunned," said Newton Minow for the AMA, "after all those years and all that trouble and expense, to have a 4-4 vote."