By Terry Baynes
(Reuters) - The Federal Trade Commission on Tuesday sued to
prevent Idaho's largest hospital operator from acquiring the
state's largest physician group.
The agency and the state's attorney general filed the
antitrust complaint under seal in federal district court in
Idaho, seeking to block St. Luke's Health System's acquisition
of the multi-specialty physician practice group, Saltzer Medical
St. Luke's, based in Boise, is the state's largest
healthcare provider, with six hospitals and more than 10,000
employees. Saltzer, with 44 physicians, specializes in family
practice, internal medicine and pediatrics, according to the
"The combination of St. Luke's and Saltzer would give it the
market power to demand higher rates for health care services
provided by primary care physicians in Nampa, Idaho and
surrounding areas, ultimately leading to higher costs for health
care consumers," the FTC said in a statement.
St. Luke's would become the dominant provider of adult
primary care physician services in Nampa, with nearly 60 percent
of the market there, added Richard Feinstein, the director of
the FTC's Bureau of Competition.
The FTC action follows a private lawsuit that two
competitors, Saint Alphonsus Health System Inc and Treasure
Valley Hospital, filed against St. Luke's in November. The suit,
which is pending in district court in Boise, accused St. Luke's
of engaging in an "unprecedented" level of expansion, acquiring
22 physician practices and adding more than 200 physicians.
In that case, the district court denied the competitors' bid
for a preliminary injunction blocking the Saltzer acquisition,
which closed on Dec. 31.
St. Luke's general counsel Christine Neuhoff said the
company would defend the deal against the charges. She said the
FTC's lawsuit runs counter to the goals of health care reform to
develop physician-hospital systems that improve outcomes and
Being part of a larger health system gives doctors the
flexibility and time to come up with ways to improve healthcare
while reducing costs, a risk they could not otherwise take on in
a smaller practice, she said.
"On the one hand, the Centers for Medicare & Medicaid
Services is encouraging integration. On the other hand, the FTC
views integration as consolidation, and not as a means to the
end of a better healthcare delivery model," Neuhoff said.
St. Luke's acquisition is the latest hospital deal to come
under FTC and state scrutiny for potential antitrust violations
as hospitals acquire physician practices to lower costs and
comply with the Affordable Care Act.
In August, the Nevada-based healthcare network Renown Health
settled charges from the FTC and Nevada's attorney general that
its acquisition of two cardiology groups in Reno reduced
competition for providing adult cardiology services. Because the
merger had already been completed, Renown settled by releasing
up to 10 staff cardiologists from their agreements to not
compete with Renown, allowing them to join competing cardiology
In 2011, Providence Health & Services abandoned its plans to
acquire two cardiology clinics in Spokane, Washington, after
coming under FTC scrutiny. That same year, MaineHealth settled
antitrust charges from Maine's attorney general related to its
acquisition of two cardiology practices in Portland.
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