Healthcare Antitrust Lawsuit in Boise Backyard

bigstock-Medical-Lawsuit-28721495Idaho often experiences an identity crisis.

Not from the residents of Idaho, but the rest of the country. Many are convinced Idaho is really Iowa.

I’m not sure the Chamber of Commerce would choose a precedent-setting antitrust lawsuit as the vehicle to put Idaho (and its capital Boise) on the map, but that may be the result.

An Idaho federal judge put the brakes on St. Luke’s Health System’s acquisition of Saltzer Medical Group.

The healthcare industry had been watching in great anticipation.

The Players

Allow me to introduce you to the local players in this lawsuit.

St. Luke’s Health System is an Idaho-based, not-for-profit health system. Founded in Boise in 1902, today St. Luke’s has 6 hospitals throughout Idaho and over 100 clinics.

Saltzer Medical Group is Idaho’s largest independent physician group, based in Nampa, Idaho, the state’s second largest city, located 20 miles west of Boise.

Saint Alphonsus Health System is a Boise-based health system, owned by Trinity Health of Michigan and has four regional hospitals.

Treasure Valley Hospital is a physician-owned, short–term care, non-emergency surgery center, operated by Surgical Care Affiliates (SCA). Treasure Valley Surgery Center is a Surgical Care Affiliates and Saint Alphonsus Health System joint venture located in Nampa.

The Lawsuit

St Luke’s purchased Saltzer Medical Group as part of its accountable care organization (ACO) strategy.

ACOs are a network of physicians and hospitals that coordinate patient care with the goal of becoming more efficient and cost-effective. ACOs use financial incentives to meet high quality standards.

With health reform’s Affordable Care Act’s emphasis on delivering better health care outcomes, ACOs are becoming increasingly popular.

Saint Alphonsus, Treasure Valley Hospital, the Federal Trade Commission, and the Idaho Attorney General accused St. Luke’s of violating anti-trust laws. The accusers maintained the purchase of Saltzer Medical Group gave St. Luke’s an unfair share of the market in Nampa.

U.S. District Judge B. Lynn Winmill agreed. Judge Winmill concluded that with the dominance of acquiring 80% of the primary care physicians in Nampa, St. Luke’s would have “significant bargaining leverage over health insurance plans.”

The judge based the ruling on a prediction that the acquisition would produce anticompetitive effects.

The judge did throw a bit of support St. Luke’s way by stating the following.

“The Acquisition was intended by St. Luke’s and Saltzer primarily to improve patient outcomes. The Court is convinced that it would have that effect if left intact, and St. Luke’s is to be applauded for its efforts to improve the delivery of health care in the Treasure Valley.”

Now What?

St. Luke’s plans on appealing the court’s decision.

Will this mean greater scrutiny on healthcare mergers and acquisitions (M&As)?

Modern Healthcare reports the following 2013 purchase prices from U.S. mergers and acquisitions activity.

  • Quarter 1 (2013) – $11 billion
  • Quarter 2 – $49.9 billion
  • Quarter 3 – $38.4 billion
  • Quarter 4 – $35.8 billion

Will the ruling put Idaho on the map for a groundbreaking shift in healthcare M&As? The long-term effect can only be a guessing game at this point.

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Notice of Disclaimer –Cathy Miller is not an attorney or health care provider and cannot provide legal or health care advice. The information provided is for your general background only, and is not intended to constitute legal or health care advice as to your specific circumstances. We recommend you review legislation with legal counsel and visit your physician for health care issues.


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