Antitrust as Disruptive Innovation in Health Care: Can Limiting State Action Immunity Help Save a Trillion Dollars?

On February 25, 2015, the United States Supreme Court ruled in North Carolina State Board of Dental Examiners v. FTC that state licensing boards controlled by market participants are subject to federal antitrust law unless they are “actively supervised” by the state itself. The ruling may sound narrow and technical, but the significance of the case can be inferred from the number and prominence of the amici curiae who lined up to support the North Carolina State Board of Dental Examiners (“North Carolina Board”)—first when the Federal Trade Commission’s (“FTC”) internal enforcement action was appealed to the United States Court of Appeals for the Fourth Circuit, and again when that court’s decision in favor of the FTC was reviewed by the Supreme Court. This Article evaluates the potential of North Carolina State Board to serve as a “disruptive innovation” that will make health care markets more efficient. Over time, the Supreme Court’s holding might induce states to reassess waste and inefficiency in professional services, rein in self-regulatory privilege, and modify political settlements built atop the scaffolding of professional self-governance that unduly constrain markets, even when they do not explicitly violate federal antitrust law.

But, that will only happen if states embrace the opening that North Carolina State Board offers to disrupt the status quo.