Full opinion text
PATRICK F. KELLY, District Judge. MEMORANDUM AND ORDER On August 30, 1985, defendant Blue Cross and Blue Shield of Kansas, Inc. announced its intention to terminate its contracting provider agreement with Wesley Medical Center, effective January 1, 1986. Plaintiffs brought this action seeking damages and other relief under the federal antitrust laws, and the laws of the State of Kansas. Blue Cross and Blue Shield answered and, with its subsidiary HMO Kansas, Inc., filed a counterclaim challenging certain business conduct and activities of the plaintiffs and Hospital Corporation of America. The court granted plaintiffs’ motion for separate trials of their complaint and the counterclaim. Following a lengthy trial of plaintiffs’ claims during the summer of 1986, and a significant period of deliberation, the jury returned a verdict in Wesley's favor finding Blue Cross and Blue Shield liable for anticompetitive conspiratorial restraint of trade violating Section 1 of the Sherman Act, monopolization of the relevant market violating Section 2 of the Act, and tortious interference with Wesley’s present and prospective business relations violating Kansas law. The months following the verdict were consumed with a host of motions. First, Blue Cross and Blue Shield moves under Fed.R.Civ.P. 12(b) to set aside the verdict and dismiss the case for lack of jurisdiction. Second, defendant alternatively moves for judgment notwithstanding the verdict or a new trial, under Fed.R.Civ.P. 50(b) and 59 respectively. Third, plaintiffs move for injunctive relief against Blue Cross and Blue Shield under Section 16 of the Clayton Act, 15 U.S.C. § 26. Fourth, plaintiffs move for an award of costs and attorneys’ fees against defendant pursuant to Section 4 of the Clayton Act, 15 U.S.C. § 15. Finally, plaintiffs and Hospital Corporation of America move for summary judgment on the counterclaim, under Fed. R.Civ.P. 56. On January 16, 1987, the court heard oral argument on these motions. This memorandum and order will address each. Before analyzing these issues, however, some discussion of the parties and the history of their disputes is necessary. Perhaps more so than any federal antitrust litigation to date, this case results from the unprecedented economic pressures and turmoil within the health care services and financing industries from the beginning of this decade. Although the suit focuses on participants and events in Sedgwick County, Kansas, it embraces difficult health care issues facing many areas throughout the country. All the principal players are present: hospitals and physicians as health care providers, struggling to cut costs while maintaining quality of care, adequate capital and a sufficient patient base; emerging alternative delivery systems, such as health maintenance organizations and preferred provider organizations, radically altering traditional notions about delivering and financing health care by merging those components into unified systems; a large nonprofit health care indemnity insurance plan, seeking both the lowest price for the benefit of its subscribers, and to maintain or increase its position in an ever changing market; and a large publicly held, for profit company owning and managing hospitals throughout the country, searching for the best ways to deliver low cost, quality health care to its patients, while maintaining or increasing its market position. Each of these players competes for the loyalty, and thus the dollars, of public consumers of health insurance products and health care services. All the players vigorously assert they have acted throughout in the best interests of those consumers. This case is the consequence of the parties’ perceptions and misperceptions of the public interest. The consuming public is the quintessential beneficiary of the federal antitrust laws. In its interests this case proceeded; through its interests are judged the legality of the parties’ actions, and reactions, in the marketplace. Wesley Medical Center (“Wesley”) is a 760-bed tertiary care hospital located in Wichita, Kansas. Wesley provides sophisticated health care services to residents of Wichita, Sedgwick County, the State of Kansas, and out-of-state patients. (Dkt. 76, Pretrial Conf. Order, p. 4, Stip. d; hereafter “Stip. —”.) It is a major teaching hospital, operating a number of graduate medical education residency programs in affiliation with the Wichita branch of the University of Kansas School of Medicine. Wesley additionally provides clinical services; medical research; and outreach care programs for Kansans. Six hundred and forty physicians are currently staff members at the hospital. Within the City of Wichita, Wesley competes against St. Francis Regional Medical Center, St. Joseph’s Medical Center, and Riverside Hospital. A.B. Jack Davis, Chairman and Chief Executive Officer of Wesley, views the hospital’s primary strength as the ability to provide quality care at reasonable cost. Wesley garners approximately 10% of all patient admissions throughout the State of Kansas. (Dkt. 212, Tran, of Jury Trial, Vol. 1, pp. 18-19.) Blue Cross and Blue Shield of Kansas, Inc. (“BCBSK”) was formed in 1988 by combining Blue Cross of Kansas, Inc. and Blue Shield of Kansas, Inc. pursuant to special enabling legislation. (Stip. m.) BCBSK is engaged in the business of providing private health care financing to businesses and individuals in Kansas, including Sedgwick County and the City of Wichita. (Stip. h.) Under its enabling legislation BCBSK is required to pursue health care cost containment as the primary goal in conducting its business. (Stip. o.) G. Wayne Johnston, the company’s president, defines its business as making available to Kansans “a mechanism whereby we can provide good quality health care at very reasonable prices, as reasonable as we can possibly make it.” (Tran. 3, p. 479; Tran. 4, p. 536.) BCBSK offered three principal health care financing products in 1985: conventional indemnity health insurance; a preferred provider organization called “Choice Care”; and a health maintenance organization through the company’s wholly-owned subsidiary, HMO Kansas, Inc. (“HMOK”). (Tran. 3, p. 481.) BCBSK is the largest private health care financing organization in Kansas, and its service area includes the entire state except for Johnson and Wyandotte Counties in the northeast. In 1985, all hospitals and approximately 90% of all physicians in this service area were under contract with BCBSK as providers of medical services to the company’s subscribers. (Stip. j.) No other health insurance company has contracts with all of the hospitals in BCBSK’s service area. (Tra. 3, p. 499.) BCBSK is also the federal Medicare intermediary in Kansas, administering the Medicare program throughout the company’s service area; as well, it is one of the larger third-party administrators of self-insured programs in the state. (Tran. 3, pp. 495, 499; Tran, 4, p. 519.) Conventional or “all provider” indemnity insurance, the mainstay of BCBSK’s business and historical success in Kansas, is a third-party insurance contract paying, based on certain benefit levels, a predetermined portion of the actual charges for health care services the subscriber may receive from any hospital or any doctor of his choice. (Tran. 1, p. 24; Tran. 3, p. 487.) Hospitals and doctors, as contracting providers, are reimbursed by the insurance carrier for health care services rendered its subscribers on an “as needed” basis. There is no incentive to economize, using the most cost effective methods of practicing medicine, and conventional indemnity arrangements are perceived as contributing to the overuse and spiraling costs of medical services. Alternative delivery systems, such as health maintenance organizations (“HMOs”) and preferred provider organizations (“PPOs”), emerged as a consequence of this and other trends in the health industries: “In recent years increased emphas[is] has been placed on alternatives to conventional insurance with respect to both financing and delivery. The primary reason for this is a belief that conventional insurance is neither an efficient nor an effective method to finance and deliver health care. The recent recession caused business and government to focus more attention than ever on the necessity to control and reduce the cost of medical care. The result of this increased interest has been restructuring of the delivery system to include widespread availability of HMOs and PPOs. Containment efforts have also been incorporated in the traditional programs.” (Tran. 4, p. 593, quoting Pltfs.’ Ex. 64, p. 4). In contrast to conventional indemnity arrangements, alternative delivery systems operate on selected contracting under which the subscriber is limited in his choices of medical care providers. (Tran. 3, p. 487.) By relinquishing his freedom of choice, an HMO or PPO subscriber pays less for his health care coverage; traditional indemnity insurance, with higher premiums, is more expensive. (Tran. 3, p. 490.) Health Care Plus (“HCP”) was created and developed in Wichita by Garland H. Bugg. (Tran. 17, pp. 2928-30.) HCP is a health maintenance organization engaged in the business of providing private health care financing to businesses and individuals in Kansas and elsewhere, including businesses and individuals in Sedgwick County and the City of Wichita. (Stip. e.) HCP contracts with doctors and hospitals to provide medical care to its members. HCP received federal qualification on July 1, 1981, at which time it operated only in Sedgwick County. Federal qualification designated the company had developed adequate quality assurance mechanisms, financial stability, and medical provider contracts. With this qualification HCP also received a federal loan to fund its expansion. (Tran. 17, pp. 2930-32.) The growth and success of alternative delivery systems such as HCP occur at the expense of traditional indemnity insurance arrangements (Tran. 4, p. 565), because of the historical predominance of the conventional plans. HCP was a very early, if not the first, health maintenance organization to operate in Kansas. BCBSK did not enter the market for alternative delivery systems until three years later when its health maintenance organization, HMO Kansas, received federal qualification. (Tran. 4, p. 532.) HMOK competes with HCP in private health care financing in Kansas and Sedg-wick County. (Stip. k.) As a health care financing option, HMOK also competes with BCBSK’s conventional indemnity product. (Tran. 4, p. 518.) Hospital Corporation of America (“HCA”), through its subsidiary corporations, is engaged in the business of providing health care services, private health care financing and hospital management services. (Stip. g.) From its Nashville, Tennessee headquarters, HCA owns or manages approximately 480 hospitals located in the United States and abroad. (Tran. 19, p. 3151.) The company’s defined purpose is “ ‘to attain international leadership in the health care field.'” (Tran. 19, p. 3154, quoting Pltfs.’ Ex. 292, p. 4.) Measured in number of hospitals, HCA is the largest for profit hospital company in this country. (Tran. 21, p. 3320.) Dr. Thomas Frist, one of the founders of HCA and its current chairman and chief executive officer, acknowledges the company’s hospital base may give it a “tremendous advantage” in other health care business opportunities. (Tran. 21, p. 3311.) But he also states HCA represents less than 3% of the hospital business sector in this country, and almost half the company’s total corporate revenue comes from third-party insurance carriers comprised largely of the various Blue Cross plans across the United States. (Tran. 19, p. 3187.) New Century Life Insurance Company (“New Century”) is a California corporation with principal executive offices in Nashville, Tennessee. New Century is engaged, inter alia, in the business of providing private health care financing to businesses and individuals. On June 16, 1983, the company received a certificate of authority to do business in Kansas. (Stip. f.) Dr. Walter Reazin is a medical doctor and a partner in the Hillside Medical Office, a group practice in Wichita. Dr. Reaz-in is a medical staff member at Wesley; during much of the time period related to this suit he was also Chairman of the Wesley Board of Trustees. (Stip. c; Tran. 16, pp. 2664-65, 2669.) Dr. Reazin is a longstanding subscriber to BCBSK’s indemnity insurance coverage; he is as well a contracting physician provider for BCBSK. (Tran. 16, pp. 2671, 2673.) The court fully explored the recent economic upheaval in the health care service and insurance industries in its earlier memorandum and order on defendant’s motion for summary judgment. Reazin v. Blue Cross & Blue Shield of Kansas, Inc., 635 F.Supp. 1287, 1297-1300 (D.Kan.1986) (“Reazin I”). I will not repeat that background material here other than to note particular items underlying the parties’ conduct. Prior to its merger with Blue Shield, Blue Cross utilized retrospective reimbursement contracts with Kansas hospitals to provide medical services to Blue Cross subscribers, which services were covered by the subscribers’ Blue Cross indemnity insurance policies. Under these contracts Blue Cross directly reimbursed the hospitals on the basis of 104% of allowable costs. (Stip. p.) In other words, for the greater part of Blue Cross' 40-year history the company simply paid hospitals and doctors their full charges for providing health service to Blue Cross’ subscribers. (Tran. 4, p. 536.) Under such systems, hospitals had no incentive to keep prices down for the benefit of the consumer (Tran. 21, p. 3347); Blue Cross’ retrospective reimbursement program simply did not contain costs (Tran. 4, pp. 686-87). In the mid-1970s, Blue Cross implemented a prospective rate review system for hospital reimbursement, and encouraged all Kansas hospitals to continue as participating providers under the new contract. (Stip. p.) Under the prospective rate contracts Blue Cross retained the right to approve hospital budgets and rate structures, and agreed to pay unlimited hospital charges based on approved rate structures. (Tran. 4, p. 537.) The program generated extreme variations in hospital charges for equivalent medical procedures and, similar to the earlier retrospective reimbursement system, failed to contain costs or utilization. (Tran. 4, pp. 537-39.) By the early 1980s utilization of hospital services in this state was the second highest in the entire country; Kansans were using approximately 1,000 days of hospital care for every 1,000 people. (Id.) These and other trends in the health industries provided the catalyst for rapid development of alternative delivery systems, “brokered” arrangements for purchasing and providing health services. These arrangements are fueled both by demand (from consumers of health services and insurance) and supply (of increasing numbers of health care providers). Garland Bugg’s development of Health Care Plus in Wichita and Sedgwick County was no different; he and HCP capitalized on opportunities arising from the inefficiencies of prevailing market conditions: [It] seemed that insurance companies would not listen to physicians about where care could be cost effectively delivered. [The insurance companies] insisted on having care delivered on an in-patient basis ... rather than in the doctor’s office. One example of that, a surgeon who I talked to just to see if he would be interested in having a health plan in Wichita ... said that there was one procedure, which is a proctosigmoi-doscopy. For instance, Blue Shield would pay thirty-five dollars to do that procedure in his office. If he did the same thing in the hospital, they would pay him a larger amount, if I remember it was fifty-five dollars, plus they would pay for a procedure room of a hundred and twenty dollars. [There] really was no cost effectiveness in our [then] current system. In my opinion, that’s how we got so many hospital beds today. More care really should be delivered outpatient, and the HMO concept sponsored that.... [Employers] were saying that their health care costs were just going out of the sky. If I recall at the time ... about twenty-eight percent was the average increase for a premium, and in cases where maybe a son of someone in the company would have a motorcycle accident, they might have a two or three or four hundred percent increase in their premiums from one year to the next.... (Tran. 17, pp. 2929-30). With HCP’s federal qualification in early 1981 the company received the power to mandate employers, requiring the employers to make available an HMO program as an individual alternative for their employees. (Tran. 4, pp. 531-32.) HCP used the federal mandate capability extensively and successfully. By the end of 1983 HOP had acquired approximately 13,000 members (subscribers) in Sedgwick County. (Tran. 17, p. 2932.) HCP is an “individual practice association”, or “gatekeeper”, model HMO in which members must select a primary care physician from those under contract with HCP. A member’s monthly premiums pay for all needed medical care so long as it is obtained from the chosen primary care physician, or a specialist or hospital authorized by that physician as needed. (Tran. 17, pp. 2938-39.) Each physician contracting with HCP is paid a capitation fee, a specified amount for each member choosing that physician as his or her primary care provider. HCP does not separately contract with specialists; rather, each primary care physician determines in his own discretion whether to refer an HCP patient elsewhere for needed medical attention, upon which HCP pays the specialist’s fees. HCP sets aside a portion of the capitation fund (the “withhold”), and a hospital fund, to cover specialist and hospital costs for services rendered HCP patients. Funds not used at the end of a year are returned to the contracting physicians, each of whom receives a pro-rata share of the refund based on the number of HCP patients treated. Although not contracting with specialists, HCP does contract with hospitals. HCP has capitation agreements with Wesley and St. Francis Hospitals. Under these contracts the hospitals are paid a certain monthly figure per member. These amounts are paid whether or not the members receive care at the hospitals, but if the members do seek services there the hospitals must provide care and are paid no more than the monthly capitation. HCP has fee-for-service contracts with St. Joseph and Riverside, under which those hospitals are not paid capitation but are simply reimbursed for any services which may be provided HCP members. Reazin I, 635 F.Supp. at 1300. Based on HCP’s success in Sedgwick County, in 1983 company officials sought to expand into Lawrence, Salina, Hutchinson, Topeka and other Kansas cities. The officials explored the conversion of HCP from a nonprofit to a for profit company, and eventually issued a private stock placement to generate the roughly $2 million needed for expansion. (Tran. 17, pp. 2933-35.) Under securities regulations governing such limited offerings, HCP was confined to no more than 35 sophisticated investors. HCP offered the stock to wealthy individuals inside, or closely affiliated with, the company. (Id., p. 2936.) The stock was a “very risky” investment. (Id., p. 2937.) It was offered to a number of Wichita physicians, some of whom were under contract with HCP as primary care providers, and others who were not contracting providers. (Id., pp. 2937-40.) Among the contracting physician offerees, certain individuals and groups accepted the invitation and bought the stock, while others did not; all of the noncontracting physicians who were offered stock invested in HCP. (Id., p. 2941.) The development and growth of alternative delivery systems were not the only results of the crisis in the health insurance and service industries. BCBSK faced criticism and demands for change from the Commissioner of Insurance of the State of Kansas, the Kánsas Legislature, and BCBSK’s own subscribers, all alarmed over increasing utilization and spiraling costs. From 1975 through 1982, in-patient utilization in Kansas was up to 38% higher than the national average. For the four year period from 1980 through 1983, BCBSK’s premium rate increases to subscribers were 17%, 23%, 33% and 22% respectively, an overall rate increase of 95%. (Tran. 4, pp. 538-40, 543; Pltfs.’ Ex. 191.) On January 1, 1984, BCBSK responded to these problems by implementing a new contract, the “Contracting Provider Agreement (Hospital) of the Competitive Allowance Program (‘CAP’)”, and encouraged all hospitals, including Wesley, to enter into the new agreement. (Stip. p; Tran. 4, p. 539.) CAP was a “severe change” to BCBSK’s reimbursement system under the previous cost-plus arrangements. (Tran. 4, pp. 544-45.) The CAP program established the maximum amount BCBSK would reimburse a medical provider for services within particular diagnostic related group. (Tran. 4, pp. 546-47.) Providers contracting with BCBSK under the CAP program commit themselves to a maximum allowable payment (“MAP”) for each service provided to the subscribers. The MAPs are based on uniform diagnostic-related groupings (DRGs) of medical services; thus, only a limited amount of money is paid to a provider for medical services which might be rendered. The MAP clause is one of the cost containment provisions of BCBSK’s contracting provider agreements. The clause protects BCBSK’s subscribers by assuring predictability of their health care expenses; the “hold harmless” provision ensures subscribers will not receive bills for covered medical services in excess of the contract amount BCBSK pays a participating provider. (Stip. o; Tran. 3, pp. 483-84; Tran. 4, pp. 546-47.) The CAP program was BCBSK’s effort to develop a more cost effective reimbursement program; contracting hospitals agreed to the MAPs, the hold harmless provision, utilization review by BCBSK, and other programs designed to control health care costs. (Tran. 4, pp. 547-48.) CAP contracting provider agreements also contain a significant competitive advantage for BCBSK in the form of a “most favored nations” clause under which participating providers agree to “fully and promptly inform” BCBSK about, and make available to it, any rates lower than the MAPs the hospital might agree to charge competing insurance carriers. (Tran. 4, p. 596.) At least “one of the reasons” BCBSK uses the most favored nations clause is to forestall other insurance companies from receiving any better prices from a hospital, which would enable competitors to offer lower rates to subscribers for medical insurance; that “would be a disadvantage to our subscribers.” (Tran. 4, pp. 596-98.) In 1984, all 104 Kansas hospitals in BCBSK’s service area were, contracting providers under the CAP program, including Wesley. (Tran. 4, pp. 558-59.) BCBSK’s president is unaware of any other health insurance company in this area that has the advantage of a most favored nations clause in its provider contracts, with the exception of Delta Dental Insurance Company. (Tran. 4, p. 598.) Slowly, BCBSK finally developed its own alternative delivery system for health care financing. (Tran. 4, p. 574.) HMO Kansas received state certification in February, 1984, and did not receive federal qualification until July, 1984, over three years after Health Care Plus. (Tran. 6, pp. 1036-37; Tran. 12, p. 2027; Knack Depo., p. 110.) Although HMOK was licensed to operate throughout the State of Kansas, BCBSK recognized HCP’s earlier arrival and presence in Wichita placed HMOK at a considerable disadvantage here. (Tran. 4, pp. 533-34, 575; Tran. 6, p. 1038.) From the outset, HMOK experienced difficulty penetrating the Wichita market. (Tran. 6, pp. 1079-80; Def’s. Ex. 546.) HCP’s early presence in this market al--lowed it to capture a significant membership base and develop a comprehensive physician provider list. {Id.) HMOK attempted to enter Wichita with the same HMO model as HCP (an IPA or gatekeeper model), offering substantially similar benefits. (Tran. 12, pp. 2027-28.) Employers are not required to offer more than one federally qualified HMO option to employees; only an HMO different in structure and benefit design than existing HMOs can mandate employers to offer its products as a second option to employees. (Tran. 4, p. 532; Tran. 12, pp. 2022-23.) Even after receiving federal qualification HMOK was therefore unable to mandate employers to offer HMOK to their employees along with HCP. In addition to problems in attracting sufficient membership, HMOK experienced difficulties in securing an adequate physician provider base. Certain groups declined to do business with HMOK from the outset. Another disadvantage HMOK faced was the higher capitation paid to physicians by HCP. (Tran. 8, p. 1348.) HMOK offered two different risk packages to physician providers: full risk and partial risk contracts. (Tran. 16, pp. 2702-03; Tran. 29, p. 4762-63.) However, HMOK required physicians already under contract with HCP to accept HMOK’s full risk contract in order to participate. (Tran. 29, pp. 4762-63.) Certain doctors objected to this requirement and declined to participate in the HMOK program. (Tran. 29, p. 4763.) Nevertheless, a number of primary care physicians and specialists in Wichita entered contracts with HMOK in late 1983 and early 1984. (Tran. 6, pp. 1037-38; Knack Depo., pp. 115-16.) Included in this number were the Hillside Medical Office and the Wichita Clinic, both of whom were already under contract with HCP when they entered separate contracts with HMOK in late 1983. (Tran. 16, pp. 2688, 2706; Tran. 26, pp. 4144-45.) Physicians in both practices subsequently purchased stock in HCP during early 1984. HMOK’s problems in attracting an adequate membership base proved insurmountable. When federally qualified in July of 1984, HMOK had enrolled 1800 members. By the end of that year, HMOK’s Wichita enrollment totalled only 2000 members, while HCP had approximately 35,000. (Tran. 12, pp. 2027; Tran. 17, p. 3025; Pltfs.’ Ex. 65, p. 9.) The Hillside Medical Office terminated its contract with HMOK on July 11, 1984. (Tran. 6, pp. 1065-66; Tran. 25, p. 4051.) The Wichita Clinic terminated its contract with HMOK on July 19, 1984. (Tran. 17, p. 2993; Tran. 25, p. 4051; Def’s. Exs. 455, 456.) In early September, 1984, the HMOK Board of Directors voted to discontinue HMOK’s activities in Sedgwick County (Def s. Ex. 553), and the Wichita area primary care physicians were notified of this decision on March 27, 1985 (Pltfs.’ Ex. 49). However, HMOK continued its business pursuits in other parts of Kansas, and is a strong competitor against HCP in areas where the two companies entered thosé markets at similar times. In 1984 Wesley was the largest, strongest and most competitive low cost, nonprofit tertiary care hospital in this area. Concerned about Wesley’s future, in the fall of 1984 the hospital’s administrators began a feasibility study of the sale of its assets to a well-financed, investor-owned, for profit corporation. The factors motivating this decision included the market trends and economic forces previously discussed. Reactions to high utilization and rising costs of medical care were severely impacting the health care sectors; by that time Kansas in-patient utilization had decreased more than 50%. (O’Brien Depo., p. 153.) In addition to reduced utilization, Wesley faced increasing regulatory controls and restricted revenue from third-party payors, increasing competitive forces, and increasing capital requirements. Sale of the hospital’s assets to a profit corporation was perceived as offering the following advantages: unlimited access to capital; system efficiencies (purchasing, marketing, accounting, etc.); reduced economic risk; improved market position; preservation of quality; and an expanded, enhanced health care mission. (Stewart Depo., pp. 104^-05; Def’s. Ex. 81.) Wesley administrators approached HCA, “the best in the field,” because the company possessed the quality care and administrative efficiencies Wesley sought. (Tran. 1, pp. 36-37.) At that time HCA was interested in adding tertiary care hospitals to its operations because of government deregulation programs and the emerging diagnostic-related group payment systems. Attempting to relate the growing cost effectiveness of the marketplace to quality health care, HCA was seeking “centers of excellence” around the country through which the company could develop a provider network to meet these needs. (Tran. 19, p. 3168.) Negotiations between Wesley and HCA continued throughout the fall, and in November, 1984, they agreed to the sale of Wesley’s assets for $265 million. (Tran. 1, p. 36; Tran. 19, p. 3174.) Dr. Thomas Frist, HCA’s Chairman of the Board, lists the following as the factors supporting the company’s decision: Wesley’s past, present and projected future financial performance; the hospital’s national reputation as a teaching school; the quality medical staff; the characteristics of the marketplace in which Wesley is located; HCA’s ability to enter the midwest where it did not have a strong presence; and the strategic importance of Wesley, as a “center of excellence,” to HCA’s overall goals. (Tran. 19, pp. 3172-73.) On July 11, 1985, HCA, through its wholly-owned subsidiary HCA Health Services of Kansas, Inc., consummated the sale and acquired Wesley. (Stip. v.) Of considerable importance to Wesley’s decision to sell was its understanding of HCA’s operational philosophy of decentralized control and local autonomy for its hospitals. (Tran. 1, pp. 37-38.) Day to day operation of the hospital remains the responsibility of A.B. Davis, the chief executive officer, and control of the Medical Center remains the province of the Wesley Board of Trustees, the same local group of volunteers who likewise made hospital policies prior to the sale. HCA preserved existing Wesley management personnel following the sale because of HCA’s confidence in Wesley’s sound, proven management team. (Tran. 19, p. 3176.) Wesley’s duties to HCA are primarily financial: providing financial information to the company and its shareholders, and participating in budget approval processes. (Tran. 1, pp. 38-39.) At that point HCA was facing criticism for its reluctance to enter the health care financing industry, particularly with HMOs. (Tran. 19, p. 3178.) Initially, in order to provide life and other insurance products primarily for its own employees, on April 25, 1985, HCA purchased New Century Life Insurance Company, an inactive shell company with licenses to operate in over 30 states. (Tran. 19, pp. 3181-82; Stip. u.) HCA purchased the company because of its multi-state licenses; New Century gave HCA access to life insurance products in those states. (Tran. 19, p. 3182.) During this time period Health Care Plus began exploring the possibility of expanding its HMO operations beyond Kansas, to a national scale. (Tran. 17, p. 2963.) Recognizing the additional capital needed to finance this expansion, HCP officials explored various opportunities with investment bankers, venture capitalists, and other institutional investors. {Id., pp. 2963-64.) Upon learning of HCP’s plans, Wesley’s Davis indicated HCA might be interested because that company was in the process of purchasing some HMOs and third-party administrators in other parts of the country. {Id., p. 2965.) In the spring of 1985 HCP began discussing its plans with HCA, initially focusing on the possibility of HCA making a limited investment in HCP. {Id., pp. 2966-67.) HCA lacked the expertise needed to successfully create and market its HMOs, and recognized it would take years to adequately develop the necessary internal management systems and guidance. (Tran. 19, p. 3180.) When HCA committed itself to the purchase of Wesley in late 1984, the company was not planning to purchase an HMO in Wichita. (Tran. 19, p. 3181.) With this new opportunity, however, HCA ultimately pursued HCP as a potential acquisition because HCP offered the most advanced, sophisticated management tools of any HMO under consideration. {Id., p. 3180.) For their part, HCP officials eventually discarded the idea of a limited investment, to avoid “creeping acquisition” as capital needs grew and the risk of ultimately realizing less than the full value of the company. (Tran. 17, p. 2967.) The sale of HCP to HCA was publicly announced in May, 1985; on August 14, 1985, HCA, through its wholly-owned subsidiary Health Care Plus of America, Inc., consummated the acquisition of HCP for approximately $41 million. (Tran. 17, p. 2970; Tran. 19, p. 3269; Stip. w.) The purchase price was the equivalent of $18.00 per share of HCP’s outstanding stock. Corporate personnel and area physicians who previously bought that stock, at prices ranging from $.25 to $1.00 per share, made substantial profits from the sale to HCA. Following the acquisition, Garland Bugg was appointed President and Chief Executive Officer of HCP of America, Inc., with responsibility for overall management and development of HCP plans in the states assigned to that unit. (Tran. 17, p. 2971.) Much like the post-acquisition management of Wesley, HCP management remained decentralized and autonomous; its interaction with HCA was primarily financial. (Tran. 17, p. 2971.) HCP continues to contract with Wesley, St. Francis and St. Joseph Hospitals in Wichita to provide medical care to its members. (Tran. 1, p. 96; Tran. 17, p. 2970.) Wesley, a contracting provider with BCBSK from the 1940s and a charter member of the original Blue Cross program formulated under the Kansas enabling statute, has participated in BCBSK’s CAP program since its implementation in 1984. (Stip. q.) Five days after the effective date of Wesley’s sale to HCA, BCBSK sent Wesley a revised CAP contract reflecting the hospital’s name change. (Tran. 1, pp. 34, 36; Pltfs.’ Exs. 6, 7.) Approximately two weeks later, on July 29, 1985, BCBSK sent Wesley the “Hospital Policies and Procedures and MAPs” (maximum allowable payments) materials for calendar year 1986. (Tran. 1, pp. 34-36; Pltfs.’ Exs. 74, 75.) The materials reflected a b% increase in the 1986 MAPs over the 1985 levels. (Tran. 1, p. 36.) The cover letter from BCBSK to Wesley stated in part: No action is required, at this time, if your hospital desires to continue contracting with Blue Cross and Blue Shield of Kansas during calendar year 1986. We hope that you will find the 1986 Policies and Procedures and MAPs acceptable in order that we may continue our contractual relationship in 1986. (Tran. 1, p. 35, quoting Pltfs.’ Ex. 74.) After abandoning HMOK in the Wichita area in early 1985, BCBSK attempted to re-enter the market with a preferred provider organization known as “Choice Care”. (Tran. 4, p. 631.) BCBSK originally structured Choice Care to include no more than 35% of the most cost effective area physicians as participating providers, with BCBSK exercising a stringent utilization review program and a significant capitation withhold for those physicians. (Tran. 2, pp. 248-49.) On this basis competitive bids were then solicited from all Wichita hospitals. (Tran. 4, p. 631.) BCBSK also represented that during the first year of Choice Care operation, from 40% to 60% of its current CAP subscribers would likely switch to Choice Care. (Tran. 2, pp. 249-50.) In May, 1985, Wesley, which seeks to participate in programs of all third-party payors likely to generate patient business, bid significant discounts from its regular charges, relying on BCBSK’s announced structure of Choice Care. (Tran. 2, pp. 246-47; Tran. 16, p. 2821.) BCBSK received bids from all four Wichita hospitals, and chose Wesley and St. Francis as the successful bidders on Choice Care. (Tran. 4, p. 631; Tran. 7, pp. 1165-1169.) The Choice Care physician withhold provision proved too much, however, and BCBSK was unsuccessful in securing the participation of the necessary physicians. (Tran. 2, p. 250-51.) BCBSK then altered the Choice Care utilization review and physician payment mechanisms. (Tran. 7, pp. 1185-86.) Although the modified Choice Care program would have appealed to more physicians and subscribers, it exposed the bidding hospitals to greater financial risk for the same reasons. The bids were calculated on assumptions of a certain patient load; BCBSK’s subsequent alterations meant the lower rates would be extended to more patients than the hospitals originally anticipated. (Tran. 16, p. 2822.) Officials from Wesley and BCBSK met throughout June and July of 1985, attempting to resolve these problems. (Tran. 2, p. 251.) On July 24, John Knack, Vice President of Marketing for BCBSK, and Marlon Dauner, BCBSK Senior Vice President for External Affairs, met with Edmund Berry, Wesley’s Senior Vice President and Chief Finance Officer, to discuss the Choice Care program. (Tran. 7, p. 1186; Tran. 16, p. 2818.) Knack and Dauner anticipated they could obtain Wesley’s commitment to the Choice Care contract; they attempted to respond to Wesley’s concerns about the contract and persuade Berry to act. (Tran. 7, p. 1190.) However, Berry lacked the authority to act alone on Wesley’s behalf; he was authorized only to continue negotiations and attempt to resolve the financial discrepancies of the Choice Care contract. (Tran. 2, p. 253; Tran. 17, p. 2844.) The other Wesley officials responsible for the Choice Care contract, Robert O’Brien, Senior Vice President, and Donald Stewart, President and Chief Operating Officer, were not present at the July 24 meeting. (Tran. 2, pp. 251-53; Tran. 7, p. 1186.) Berry indicated he was facing problems with the HCA office in Dallas regarding the existing terms of the Choice Care contract as written, and asked how Wesley could rebid the program. The BCBSK representatives replied they would not reopen the program for new bids. At that point, Berry allegedly responded Wesley desired to participate as a Choice Care hospital because “ ‘it was HCA’s intention to put one of the other large hospitals in Wichita out of business and then work with the other.’” (Tran. 7, pp. 1190,1193-94.) Berry acknowledges there was detailed discussion about other Wichita hospitals and possible adverse consequences of their present bids on Choice Care, but denies making any such statement about HCA’s intent to put another hospital out of business, either at the July 24 meeting or at any other time. (Tran. 17, pp. 2852-53.) After further discussion, Berry concluded the July 24 meeting stating he needed to do more work on the Choice Care contract and would later contact BCBSK. (Tran. 7, p. 1203.) Throughout early 1985 BCBSK was also attempting to reestablish HMO, Kansas in the Wichita area. (Tran. 7, pp. 1153-56.) Unlike the abandoned HMOK program, the “new” HMOK was designed as a staff model HMO, rather than an IPA or gatekeeper model; through the staff model, BCBSK sought to establish its own medical practice in the Wichita community, rather than contract with individual physicians. (Id., pp. 1155-56.) St. Joseph’s Medical Center, and later St. Francis Regional Medical Center, both expressed enthusiasm for opportunities presented by the new HMOK. Officials from those hospitals and BCBSK periodically met during the late spring and summer of 1985 to discuss possible HMOK alternatives: selling financial interests in HMOK; forming another HMO; or developing a hospital-based HMO for the Wichita area. (Id., pp. 1156-59, 1213-15.) On July 24, Knack and Dauner went from the Wesley meeting to another scheduled meeting with St. Joseph and St. Francis representatives regarding HMOK. Dauner told the hospital officials about the earlier meeting with Berry, expressing “alarm” over Berry’s purported statement. (Tran. 7, pp. 1206-07.) However, there was no discussion at that time about the possibility of BCBSK terminating Wesley as a contracting provider. (Id., p. 1207.) The Steering Committee of the BCBSK Board of Directors met on July 30, 1985. (Pltfs.’ Ex. 167.) The steering committee is composed of Johnston, Dauner, Knack, and other senior management officials; they are not members of the board of directors, but are responsible for the decision-making process generating recommended policies which are then offered to the full board or its executive committee for approval and adoption. (Tran. 2, pp. 215-16; Tran. 4, p. 644.) Berry’s alleged remarks at the July 24 meeting with Dauner and Knack were not mentioned at the July 30 steering committee meeting, and there was no discussion of the possible termination of Wesley. (Tran. 4, pp. 643, 652; Pltfs.’ Ex. 167.) On July 31, Wesley received the proposed Choice Care contract from BCBSK. (Tran. 17, p. 2845.) On August 1, 1985, an article entitled “Hospital Corp. to Market Group Health Insurance” appeared on page 19 of the Wall Street Journal. In its entirety, the article stated: NASHVILLE, Tenn. — Hospital Corp. of America said it will begin selling group health insurance and a preferred provider hospitalization plan in three cities this month. Hospital Corp., a for-profit operator of hospitals and health-maintenance organizations, said it will offer the group health insurance through New Century Life Insurance Co., which it acquired earlier this year from E.F. Hutton Group, Inc. New Century has insurance licenses in 35 states. The move is part of an industrywide trend to mesh health insurers with health-care providers. “Within the next six years, we expect to see two or three dominant fully integrated health-care companies,” said Thomas F. Frist, Jr., chief executive and president. Hospital Corp. also eventually will offer life insurance, Mr. Frist said. People covered by Hospital Corp. health insurance wouldn’t be required to use Hospital Corp. facilities. But under the preferred provider plan also unveiled yesterday, Hospital Corp. will give financial incentives in the employees of eligible companies who use facilities designated by the chain. Hospital Corp. will begin marketing both plans in Nashville and Chattanooga, Tenn., and Charleston, S.C. It plans to offer them to 15 to 20 additional cities within 18 months, a spokesman said. Hospital Corp. is initially targeting the group health-care programs at companies with five to 250 employees, but eventually will seek larger employers, a company spokesman said. (Def’s. Ex. 278.) In the preliminary meetings between BCBSK, St. Joseph and St. Francis concerning HMOK, the hospitals indicated they desired majority ownership of the HMO. BCBSK’s Johnston, however, refused this idea. (Tran. 6, p. 962.) On August 4, 1985, administrative officials from both hospitals met in Wichita with Marlon Dauner, John Knack, and William Pitsenberger, BCBSK’s general counsel, and presented the three men with a personal opportunity to leave their employment with BCBSK and join the hospitals in the creation, management and marketing of a new HMO which would be owned by the hospitals. (Tran. 6, pp. 959-964.) This HMO would have competed with all of the BCBSK health insurance products (CAP, HMOK and Choice Care), as well as HCP. (Id., p. 961.) Dauner, Knack and Pitsenber-ger indicated their interest in such a program, but required a firm commitment from the hospitals that same day. That commitment was not forthcoming, and the idea was dropped. (Id., pp. 965-66.) Wayne Johnston was not aware of this meeting when it occurred. (Id., p. 960.) Immediately following that meeting, Dauner, Knack and Pitsenberger developed an alternative program to be owned and operated by BCBSK but which would be structured on a hospital-based HMO in conjunction with St. Joseph and St. Francis Hospitals. What emerged was a new HMOK product known as the “Kansas Health Plan”, a corporation owned by St. Francis and St. Joseph Hospitals and under contract with HMO, Kansas. (Tran. 6, pp. 966-67.) The next day, August 5, 1985, John Knack returned to Wichita to speak with St. Francis and St. Joseph representatives about the Kansas Health Plan concept. (Tran. 6, pp. 967-68.) The BCBSK steering committee met in Topeka at the same time, during which there was general discussion about the Wichita health care environment but nothing specifically related to Wesley, HCP or HCA. (Tran. 4, pp. 645-46; Tran. 6, pp. 968-69.) The headnote on the minutes of the August 5 steering committee meeting states: PLEASE NOTE: On Monday, August 12, Steering Committee will have its usual meeting at 8:30 a.m. for which there will be an agenda. The meeting will be adjourned for lunch and meet again immediately thereafter, probably for the rest of the afternoon. The afternoon portion of the meeting will cover environmental changes occurring since the planning session and how these affect the direction of the Plan and plans for 1986. (Pltfs/ Ex. 168, p. 1.) The next BCBSK steering committee meeting occurred as scheduled on August 12, 1985. (Tran. 4, p. 647; Tran. 6, p. 969.) The relevant portion of the minutes of that meeting states simply: “The remainder of the afternoon was spent discussing various environmental changes in the health care scene.” (Pltfs/ Ex. 169, p. 4.) What actually occurred that afternoon was anything but a casual discussion. Marlon Dauner went to that meeting prepared to recommend that the BCBSK Board of Directors terminate Wesley as a contracting provider under the CAP program. (Tran. 6, p. 970.) The proposal was made and that afternoon the steering committee decided to recommend “to the Executive Committee of our Board of Directors to cease contracting with Wesley.” (Tran. 4, p. 647.) The steering committee also decided on August 12 to abandon the Choice Care PPO program in Wichita. (Tran. 4, p. 647; Tran. 6, pp. 969-70, 977.) The last decision made by the steering committee on August 12 is critical: the committee members, BCBSK’s senior management staff, also decided to seek to negotiate reduced MAPs with the other Wichita hospitals in order to acquire a price competitive CAP insurance product without Wesley’s participation as a contracting provider. (Tran. 6, pp. 969-70, 977-78.) On August 13, 1985, the day after the steering committee meeting, BCBSK’s Dauner and Knack met with representatives of St. Joseph and St. Francis Hospitals. Dauner and Knack opened that meeting by announcing that BCBSK was considering terminating Wesley’s contracting provider agreement and, because that would result in a different CAP product, BCBSK wanted the hospitals to accept at least a 20% reduction in the MAPs. (Tran. 6, pp. 980-81; but see Pltfs. Ex. 4 (BCBSK initially sought 25% discount).) The hospital representatives indicated at this meeting they were receptive to discounting the MAPs contingent upon Wesley’s termination by BCBSK. (Tran. 15, pp. 2600-03.) After further discussion, Knack was asked to appear before the St. Francis executive committee the following day to discuss the proposed Wesley termination and MAPs reduction. (Tran. 15, p. 2498.) On August 14, Knack made the requested presentation to the St. Francis executive committee. The minutes of the August 14 meeting read in pertinent part as follows: Bruce Carmichael [St. Francis’ Vice President of Planning] gave a brief update of the recent transactions between St. Joseph, Blue Cross & St. Francis. After a brief discussion, John Knack, Blue Cross, Marketing, was asked to join the group. He explained the CAP Program which would be a program signing contracts only with St. Joseph and St. Francis. The discussion of a discount was held. Steve Harris [St. Francis’ Chief Financial Officer] was asked to work out what would be a percentage that SFRMC could live with. [Mr. Knack stated that an] answer would be necessary by August 16th so that Blue Cross could cancel the Wesley contract, giving 120 day notice.... (Pltfs.’ Ex. 3; Tran. 12, p. 2103.) BCBSK’s contracting provider agreement with Wesley required 120 days’ notice for termination without cause. BCBSK was accordingly required to give Wesley notice of termination no later than September 1, 1985, for an effective date of January 1, 1986. Within a week after the August 14 meeting, Carmichael called Knack and told Knack that St. Francis did not want to give discounts on all MAP payments but would give discounts on any new business resulting from Wesley’s termination. (Tran. 11, p. 1883.) Knack informed Carmichael that Carmichael’s suggested modification of the arrangement was unacceptable to BCBSK. (Id., pp. 1884-85.) On August 21, Knack again met with representatives of St. Francis and St. Joseph and further discussions ensued concerning the Wesley termination/MAPs discount. (Id., p. 1889.) At the August 21 meeting, Knack indicated that Blue Cross would be making a similar proposal to Riverside Hospital. (Id.) At this same meeting BCBSK offered the hospitals another suggested modification: instead of terminating Wesley and obtaining reduced MAPs from the “Saints”, BCBSK offered to market a PPO product featuring only St. Francis and St. Joseph as preferred providers. (Tran. 11, pp. 1889-90.) St. Francis and St. Joseph hospital officials responded they wanted no part of the suggested alternative because they preferred BCBSK’s original proposal involving Wesley's termination as a contracting provider under the CAP program. (Id., pp. 1890-91.) Two days later, on August 23, a meeting was held between representatives of St. Francis and St. Joseph Hospitals. At that meeting, St. Francis’ agreement to accept a 20% MAPs reduction may have been communicated to St. Joseph. (Tran. 14, pp. 2295-96.) That very day Wayne Johnston sent out a letter calling a special August 29 meeting of the BCBSK board of directors executive committee: This will serve as a reminder following my telephone call to each of you that we have called a special meeting of the Executive Committee for Thursday, August 29, ... We have a critical decision to make regarding contracting with hospitals. We found it necessary to call a special meeting of the Executive Committee to consider this critical issue before the scheduled September meeting. We have discussed this with your Chairman, Pete Haas, and he agrees such a meeting should be called. I’m enclosing a few articles that I hope will indicate to you some of the new competitive pressures we feel developing. If you have the opportunity to review this material, I think it will become evident that many new competitors are coming on the scene and we will see shortly health care cost price wars. This material will give you a better understanding of some of the recommendations we will be making on August 29. (Pltfs.’ Ex. 171.) Accompanying the letter were reports and articles detailing the plans and operations of the following health care and health insurance corporations: HCA; American Medical International; National Medical Enterprises; Hu-mana; U.S. Health Care Systems; Prudential; and Cigna. (Id.) At the August 29 executive committee meeting, Wayne Johnston presented the staffs proposal to terminate Wesley as a contracting provider. His presentation began with a review of the health care environment and BCBSK’s responses to those changes. The minutes reflect the following: What is happening is a total revolution is occurring in health care. The public is seeing rapid growth of for-profit hospital chains such as the Hospital Corporation of America (HCA), Humana and others. Not only is the rapid growth occurring but these for-profit hospital chains are developing very strong strategies toward what they call “vertical integration”. These chains will not only supply health care, they will also provide insurance coverage and are in the process of buying PPO’s, HMO’s and developing third party administrators and doing it successfully. The problems faced by Blue Cross and Blue Shield are not confined to these for-profit institutions. There are 450 to 500 major hospitals around the country that belong to the Voluntary Hospital Association. This Association will be entering into the same kinds of activities as the for-profit chains, but will be doing so through the commercial insurance company — Aetna, another of Blue Cross and Blue Shield’s competitors. Physicians are equally responsive to the new competitive environment and are forming PPO’s and HMO’s. They feel strongly they must maintain control over programs being developed locally and nationally. All kinds of joint ventures are being proposed among commercial insurance companies, Blue Cross and Blue Shield Plans, etc. said Johnston. There are probably many more on the drawing board today that staff isn’t even aware of. (Pltfs.’ Ex. 10, p. 3.) Johnston commented that the foregoing was a modest effort to describe the health care revolution. What will be the result of this revolution? There will be a wide choice of health care coverage for every individual in every business and the public will be confused about what to buy. In the short run, there will be a proliferation of alternatives which the consumer likes. Staff’s assessment is that in the long run, many of those schemes will fail. Johnston feels that health care price wars are coming and asked the question, “How do we react to that?” Some feel that health care costs will not skyrocket again, but staff feels this thinking is erroneous. Johnston concluded by saying, with the review of the last three years ... where Blue Cross and Blue Shield of Kansas stands today ... and staff’s perception of the future, the major question staff wants the Executive Committee to consider today is — “Does Blue Cross and Blue Shield of Kansas wish to continue to do business with entities that openly desire to compete with the organization and enroll Blue Cross and Blue Shield subscribers in their programs? We think not. We believe now is the time to bite the bullet and work with providers who want to work with us to best serve our subscribers.” Johnston continued, saying, “HCA (Hospital Corporation of America) has a carefully structured and thought through strategy to dominate health care and health insurance in Wichita and surrounding areas. They have the experts and dollars to do it with. This has been demonstrated by aggressive actions taken in Wichita with the purchase of a prestigious hospital (Wesley Medical Center), the purchase of Health Care Plus (HCP) — a competitive HMO — purchase of an insurance company and the purchase of a third party to administer self-insured groups. While staff isn’t aware of the future plans of HCA, it is apparent they have abundant capital to use in Wichita and perhaps other areas. With the present structure of Blue Cross and Blue Shield, the Plan doesn’t have the capital to vertically integrate into the health care market as do the for-profit hospital chains. Staffs recommendation to the Executive Committee is that Blue Cross and Blue Shield staff immediately inform the Hospital Corporation of America (HCA) that Blue Cross and Blue Shield will cease contracting with Wesley Medical Center effective January 1, 1986 with our CAP program.... Staff feels the Plan can retain favorable CAP programs with the remaining hospitals in Wichita that will continue to be beneficial to Blue Cross and Blue Shield subscribers. Also, they believe a sufficient number of physicians will be interested to make the program successful. Johnston said, “This was a hard recommendation for staff to make, but we sincerely believe if we don’t enter quickly into contracts with other hospitals not competing with us, they will make other arrangements and Blue Cross and Blue Shield will be left with no hospitals to have effective contracts with for our subscribers^”] (Pltfs.’ Ex. 10, pp. 3-6.) One executive committee member inquired about the effect of such a decision on BCBSK subscribers who were accustomed to a close relationship between BCBSK and Wesley. In his response, Johnston noted: [Sjtaff is not talking about Wesley Medical Center ... they are talking about HCA and must talk about this issue from that perspective.... Wesley supported Blue Cross and Blue Shield through some tough years. It appears that HCA, Humana and other organizations have made strategic decisions that they are going to be the best in the health insurance field and plan to dominate it. (Pltfs.’ Ex. 10, p. 7.) The minutes of this meeting also contain the following points which bear note: Johnston noted that when staff developed CAP it was felt it would be a program that would long accrue to the benefit of Kansans, but that hasn’t turned out to be true and the Plan has to structure itself realistically. Staff doesn’t see in the long run continuing as the organization is today since everyone will be working to form joint ventures or aligning to become more competitive. “If you do not make arrangements today, all the arrangements will be made and we will be without effective contracts for our subscribers,” noted Johnston. Staff feels there is an opportunity with the remaining hospitals in Wichita, but if Blue Cross and Blue Shield waits until a year from now that opportunity will not be available. Staff pointed out that HCA would not know any more about Blue Cross and Blue Shield’s business if they were contracting than if they were not. The critical issue is a matter of alignment to solidify Blue Cross and Blue Shield’s place in the market to retain its share of the market. The options will go very quickly, (Id., p. 9.) Prior to the August 29 meeting, Johnston had approved staff's presentation of reduced MAPs to St. Joseph and St. Francis Hospitals in Wichita, and was aware that Dauner, Knack and Pitsenberger had already discussed with those hospitals the proposed Wesley termination and new MAPs. (Tran. 4, pp. 505-06; Tran. 5, pp. 674-76.) In fact, Johnston at that time believed the Saints would be willing, if Wesley were terminated, to consider lower MAPs because instead of BCBSK subscribers choosing among all three major Wichita hospitals (Wesley and the Saints), there would be an opportunity for St. Joseph and St. Francis to acquire more patients and thus a greater market share; Johnston also understood St. Francis’ reaction to this concept to be “generally speaking favorable.” (Tran. 5, pp. 676-79.) This information, however, was never presented to the executive committee on August 29. In fact, one of the members posed the question: “If the staff recommendation is the organization not go with Wesley, what does staff suggest be done as far as the other Wichita hospitals are concerned?” Johnston responded: If action is taken not to renew the CAP contract with Wesley, staff would contact the other Wichita hospitals and modify the Blue Cross and Blue Shield contracts that are currently in effect (as of September 1, 1985) with these other hospitals. (Pltfs.’ Ex. 10, p. 11; emphasis added.) Implicit, if not express, in Johnston’s answer was his assurance to the executive committee that BCBSK’s contacts with the Saints on the issue of reduced MAPs would take place “in the future” «/the committee voted to terminate Wesley’s contract, when in fact numerous, substantial and fruitful discussions between BCBSK senior staff and the other hospitals had been continuing for weeks before the August 29 meeting. (Tran. 4, pp. 506-08.) Johnston also said to the executive committee on August 29: The provider community has initiated the new environment we find ourselves in. Blue Cross and Blue Shield did not initiate it. The provider community is going into the insurance business and will control both the supply and demand. We have seen this coming for a long time. To date, we cannot think of another alternative. It is our assessment that time is of the essence.... [T]he real issue is not HCA ... it is not Wesley ... but who do we align with while we still can and get a product with a price subscribers