Abstract

On September 18, 1995, the U.S. Court of Appeals for the Seventh Circuit handed down a decision in Blue Cross & Blue Shield United of Wisconsin v. Marshfield Clinic ) that sets two important precedents regarding the status of health maintenance organizations under antitrust law. Chief Judge Posner, writing for the court, concluded that HMOs do not constitute a market separate from the general market for medical services and that agreements, between HMOs in a region, to operate in separate areas constitute a prohibited form of market splitting.This case primarily involves two HMOs in north central Wisconsin: one a subsidiary of Blue Cross, the other a subsidiary of the Marshfield Clinic. The Blue Cross HMO claimed that the Marshfield HMO had an illegal monopoly in the region's HMO market and therefore violated the Sherman Act ).