Retaliation Against Alan Gordon, M.D.
Gordon v. Lewistown Hospital, 714 A.2d 539 (Pa. , 714 A.2d 539 (Pa. Cmwlth Cmwlth. 1998)
Issue: In March, 2006, CMA filed an AC brief in support of a physician in this antitrust related action
involving a physician and a hospital that attempted to restrain his ability to compete in the outpatient
cataract surgery market place. The physician is seeking review of the case by the United States Supreme
This case arose from a dispute between Dr. Gordon, another ophthalmologist and Lewiston Hospital. Dr.
Gordon was critical of the other ophthalmologist, who Dr. Gordon believed was using an outdated type of
cataract surgery. The hospital imposed information restraints on Dr. Gordon, prohibiting him from
discussing the differences between his surgical technique and that of the other ophthalmologist. When
Dr. Gordon violated those restraints, the hospital terminated his hospital privileges thereby eliminating his
ability to practice in the hospital and significantly injuring his ability to open a competing ambulatory
surgery center the hospital knew he was trying to open.
Dr. Gordon and his ambulatory surgery center filed an antitrust lawsuit against the hospital, arguing that
the information restraints the hospital had imposed constituted an unreasonable restraint of trade because
they prohibited him from competing in the physician services market for outpatient cataract surgery,
inpatient eye surgery and emergency eye surgery and prevented his ambulatory surgery center from
competing with the hospital for outpatient cataract surgery. Both the trial court and the appellate court
ruled against Dr. Gordon.
CMA’s AC brief challenges two aspects of the appellate court’s decision. First, the brief argues that the
appellate court erred in ruling that a physician’s ASC must be operational before the antitrust laws afford
any protection. The antitrust law must apply to protect both actual and potential competitors, at least in
cases such as this one, where the plaintiff had both the intent and ability to compete. The brief goes on to
describe the significant pro-competitive benefits of ASCs including:
“. . . improved technology, a non-institutional, friendly environment and more convenient
locations, shorter wait times and lower patient co-insurance costs than their hospital competitors
[citation omitted]. At the same time, ASCs save insurers and government health care programs
billions of dollars by obtaining lower fees and avoiding costly hospitalization. A recent study of
Medicare claims commissioned by FASA found that, on average, claims cost $320 less in an
ASC compared to hospital outpatient settings, and that procedures performed in ASCs cost the
Medicare program $11.1 billion less in 2005 than if the same procedures were performed in a
hospital. The FASA study also found that if procedures performed in hospital outpatient settings
were instead performed in ASCs, Medicare would have saved nearly $1.6 billion more in 2005.”
Second, the brief discusses the profound importance of free communication between physicians and
patients to appropriate competition in the health care marketplace. As the brief points out:
“Medicine is complex and beyond the expertise of the average person. Patients depend on their
physicians to identify problems, offer choices about treatments and explain the comparative risks
and benefits of different treatment options. A patient’s choice about health care, and therefore,
her behavior in the market as a consumer, is a function of the information she receives from her
physician [citation omitted].
The dissemination of truthful and non-deceptive information is critical to the efficient operation
of health care markets [citation omitted]. Restraints that limit the ability of physicians to
disseminate such information therefore have a significant effect on the ability of patients to
choose optimal treatments for their illnesses and can cause significant market inefficiency or
failure [citation omitted].”
Information restraints limiting the ability of physicians to disseminate truthful and non-deceptive
information, such as those imposed on Dr. Gordon, have a substantial detrimental effect on competition,
and should be upheld only where that negative effect is outweighed by strong pro-competitive
Outcome: On April 19, 2006, the Supreme Court denied Dr. Gordon’s request for review of the case.
The case is now concluded.