Scalpel Scalpers

Forceps, scalpels, hypodermic syringes and stethoscopes are precision-made and therefore expensive. Last week the Federal Trade Commission told why, for years, they have been costing far more than they should. Each year, doctors and hospitals buy about $100 million worth of such equipment, and 90% of the business has been cornered by firms in two cozy, closely knit groups: the American Surgical Trade Association and the Manufacturers Surgical Trade Association.

Between them, said FTC, the two associations kept prices up by shutting out competition. The A.S.T.A. put on a campaign to convince buyers that they should do business only with its members. Then it limited membership by refusing to admit applicants on the ground that there were already enough dealers in their territory, or that they would not go along with A.S.T.A. price schedules, or that they were engaged at the same time in some other business. The M.S.T.A. persuaded manufacturers not to sell to dealers who did not have M.S.T.A.'s approval.

As a result of the FTC's legal action, begun last spring, both associations have now promised to give up their restrictive, price-boosting practices. Because they signed a consent decree, the details of how much they had hiked the costs of medical care and surgery were not disclosed. But it was known that on some items the markup between manufacturer and buyer (doctor or hospital) had been as high as 600%. In the end, of course, the patient paid.

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