Press Release Sources: Signature MD and http://www.digitaljournal.com/pr/2062660#ixzz37qGsxEMk
LOS ANGELES, July 17, 2014 /PRNewswire/ — Signature MD, Inc. (SignatureMD), a privately held concierge medicine membership program provider headquartered in Los Angeles, is suing a much larger competitor over what it deems anti-competitive and monopolistic behavior in violation of several federal and state laws. In a complaint filed yesterday, SignatureMD alleges that MDVIP, based in Boca Raton, FL, entered into agreements with physicians that contain covenants so restrictive that little or no competition is possible in MDVIP-dominated markets.
“Every American business has to accept the fact that—particularly in a niche industry—one has to compete vigorously to be profitable, but entrepreneurs should not and cannot accept exclusion from key markets by a competitor that dominates the market and stifles competition via unfair business practices,” said Matt Jacobson, CEO of SignatureMD. “Our opponent has seized a competitive advantage that common sense, fairness, and the law all forbid, and we’re not going to stand for it. We expect to prevail, and things are going to be different.”
Concierge medicine is a relatively new form of medical practice, under which physicians offer a limited number of patients greater availability, longer appointments and more personalized medical care. In exchange patients pay membership fees typically ranging from $1,500 to $2,000 per patient per year. Concierge medicine is most popular in regions with an educated older population able to afford the additional membership fees.
According to the complaint filed in United States District Court for the Central District of California in Los Angeles by law firm Duane Morris LLP, MDVIP operates the largest concierge medicine membership program in the United States, with approximately 71% market-share nationally. SignatureMD, the third largest company in the industry, has found it difficult and, at times even impossible, to contract with physicians in key geographic markets because MDVIP contracted with the vast majority of eligible physicians in those markets and bound those physicians to evergreen contracts which forbid the physicians from practicing concierge style medicine independently or as an affiliate of a competitor.
“MDVIP’s restrictive covenants not only harm competitors, but also limit physician choice, and thereby patient choice,” according to Jacobson.
MDVIP has market-share ranging from 66% to 100% in such key markets as: Atlanta, Baltimore, Birmingham, Boston, Cincinnati, Houston, Las Vegas, Louisville, Nashville, Philadelphia, Phoenix, San Antonio, Savannah, and the South Florida cities of Boca Raton, Fort Lauderdale, and West Palm Beach. In order to compete with MDVIP in any local market other membership program providers such as SignatureMD must contract with internists and family physicians to join their program.
SignatureMD alleges that MDVIP has systematically saturated regional markets and locked competitors out of the concierge medicine membership program market by entering into unduly restrictive and lengthy exclusive agreements with physicians that prohibit them from joining a competitor’s concierge medicine program, even after their contract with MDVIP ends. SignatureMD believes that the non-competitive provisions in the MDVIP agreements are unreasonable in scope and duration the Complaint alleges. This is a violation of U.S. and California law, the complaint says, as it locks out competitive providers like SignatureMD.
“Every business seeks a competitive advantage over its rivals,” said Wayne Mack of Duane Morris in Philadelphia, Signature’s principal attorney on the case. “But there are rules and limits to how far you can go and a monopolist, like MDVIP cannot engage in exclusionary conduct. We look forward to our day in court,” Mack added.
More about SignatureMD: www.SignatureMD.com