Khushbu Shah
Dr. West
Administrative Issues
Case 1: Carilion Clinic
February 25, 2015
Khushbu Shah
Dr. West
Administrative Issues
Case 1: Carilion Clinic
February 25, 2015

Case 1: Carilion Clinic
Author: Alexandra Piriz and Kurt Darr
Summary
The Carilion Clinic has grown significantly in just over a decade, which is shown by organization’s net operating revenue of over $1.2 billion. Under the leadership of new CEO, Edward Murphy, M.D., the efforts of a mid-Atlantic acute-care hospital system to develop a vertically integrated clinic health system result in allegations of antitrust, excessive healthcare costs, disruption of physician referral patterns, and use of harsh collection practices, all of which cause a
Justice Department’s Antitrust Division sought to prevent the merger of the two hospitals located in Roanoke in 1988, and the suit attempted to block the merger due to creation of monopoly in the area. * In the 19th century, the U.S. government began prosecuting monopolies under the common law as “market interference offenses” in an effort to block suppliers from raising prices. * Congress continued to address the issue of monopolistic practices by passing the Sherman Antitrust Act of 1890, which limited the anticompetitive practices of businesses. Also, the act blocked the transfer of stock shared to trustees in exchange for a certificate entitling them to a share of earnings. * The antitrust laws address three main issues: prohibit agreements or practices that restrict free trade and competition among business entities, ban abusive behavior by a firm dominating a market, or anticompetitive practices that tent to lead to such a dominant position, and supervise the mergers and acquisitions of large corporations, including some joint ventures. * The Mayo Clinic is the leading model for vertical integration in the delivery of healthcare in the U.S. * Dr. Murphy’s action on the part of Carilion Health system, among the purchase of existing practices and the closure of others, has placed Carilion at the forefront of a battle involving local physicians, community members, and the national media. * Dr. Murphy served as vice president,