Until the mid-1970s, the U.S. Supreme Court consistently ruled that although the First Amendment to the Constitution protects freedom of speech, it did not protect "commercial speech." Commercial speech includes advertisements, brochures and other materials that relate to commercial transactions.
The Court changed course in 1976 when it struck down a Virginia law that barred pharmacists from advertising prescription drug prices. The Court found in that case that purely commercial speech is entitled to First Amendment protection from unwarranted governmental regulation.
Over the past 20 years, though, the Court has often ruled that the extent of First Amendment protection that must be afforded to commercial speech is less than the protection required for other kinds of speech (such as speech commenting on important issues of the day). In particular, the Court has stated that commercial speech may be subject to regulations that might not be permitted for noncommercial expression.
Moreover, the Court has announced a test that other courts must use to determine the validity of commercial speech restrictions.
Under this test, courts first have to determine whether the commercial speech at issue concerns lawful activity and is not misleading. If so, courts should uphold the regulation of that speech if the government proves three things: there is a substantial reason for regulating the speech; the regulation directly and materially advances that interest; and there is a reasonable "fit" between the government's ends and the means it has chosen to accomplish those ends.
As a practical matter, the fact that commercial speech is entitled to less First Amendment protection than other kinds of speech can be significant to healthcare marketers.
Consider what happened recently to Dr. James Desnick, an Illinois ophthalmologist who hired a telemarketing firm to increase his practice. The telemarketers called elderly people and offered them a free eye examination and free transportation to Dr. Desnick's eye center.
The Illinois Department of Professional Regulation contended that Dr. Desnick's use of the telemarketing firm violated an Illinois statute that prohibits licensed health care providers from using third parties to solicit patients. It then began proceedings against Dr. Desnick to suspend or revoke his license.
Dr. Desnick responded that his use of telemarketers was protected speech under the First Amendment. The lower courts agreed, and the department appealed to the Illinois Supreme Court.
In its opinion, the court analyzed the Illinois anti-solicitation law under the U.S. Supreme Court's test.
It noted that the telephone solicitations concerned lawful activities --a free trip to a doctor's office for a free exam -- and that the information the telemarketers communicated was not misleading and could be easily understood by the targeted audience. Moreover, the court said there was nothing inherently misleading about Dr. Desnick's targeting of elderly, Medicare recipients.
Next, though, the court found that Illinois had a substantial interest in regulating the medical profession, preventing overreaching by physicians and protecting citizens' right to privacy.
Dr. Desnick contended that even if that were true, the Illinois law on which the department relied did not directly and materially advance that interest.
The department countered that the potential for overreaching and abuse posed by Dr. Desnick's solicitations was "manifest and not remote." In the department's view, promoting free medical care to Medicare recipients provided the potential for abuse when the patient was not informed that not all procedures were completely free.
The court pointed out that Dr. Desnick had been alleged to have performed unwarranted cataract surgeries. Then, it said that the "very fact" that he targeted elderly, Medicare-insured individuals and sought to physically bring them into his clinic for ostensibly "free" services "revealed that his pecuniary interests likely predominate medical issues." The court concluded that the Illinois law materially prevented the potential harms about which the department was concerned.
Finally, the court considered whether the Illinois law was drawn narrowly enough to reach its goals without prohibiting too much speech.
Dr. Desnick argued that there were alternatives: the state could restrict false, fraudulent, deceptive or misleading solicitation or could consider limitations on the time or manner of solicitations. The department disagreed, urging the court to find that the law was an appropriate response to prevent overreaching and its attendant evils. The court again agreed with the department, concluding that there was a "reasonable fit" between the state's substantial interests in preventing the risk of medical professional overreaching and abuse and in protecting the public from intrusions into their privacy and the law's prohibition against solicitations. It concluded, therefore, that the law could be applied to prohibit Dr. Desnick's targeted telephone solicitations to elderly Medicare recipients.
The lesson for healthcare marketers is that they must be aware of commercial speech regulations and must make sure in advance, to the greatest extent possible, that advertisements and other marketing claims do not violate the applicable rules. Failure to do so can result in the loss of a provider's most important asset --its license