A. Exclusive contracts consist of an agreement between the hospital and the physicians that the hospital will purchase the services of the physicians exclusively for a period of time. Often, hospitals find that exclusive contracts for the provision of services, such as anesthesiology and emergency medicine, are necessary for efficient operation of the hospital. However, they are still subject to review under Section 1 of the Sherman Act. Section 7 of the Clayton Act only applies to commodities and therefore does not apply to physicians' services.

B. In Collins v. Associated Pathologists, Ltd., 676 F. Supp. 1388 (C.D. IL. 1987), aff'd 844 F.2d 473 (7th Cir.), cert. denied, 488 U.S. 852 (1988), the court determined that there was no violation when pathologists were granted an exclusive contract. The court ruled that the appropriate analysis was the extent to which competition was foreclosed in the job market for pathologists nationwide.

C. In Jefferson Parish Hospital District No. 2 v. Hyde, 466 U.S. 2 (1984), the Supreme Court ruled that an exclusive contract for anesthesia services was a tying arrangement because the hospital had the chance to force patients to buy certain anesthesia services if they also used the hospital services. Notably, the Court found that the tying arrangement was not illegal. The Court did not apply the per se analysis because the hospital did not have substantial market power. Under the rule of reason analysis, the Court found that the arrangement was supported by legitimate business reasons.