District Court blocks hospital acquisition of a physician practice

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District Court blocks hospital acquisition of a physician practice, concluding that anti-competitive effects outweigh potential quality and efficiency gains from consolidation - .PDF file.

In the first ever FTC-litigated challenge to a hospital system’s acquisition of a physician group, the US District Court for Idaho ruled in favour of the plaintiffs (the FTC, Idaho’s attorney-general and St Alphonsus, a competing hospital system). The plaintiffs challenged St Luke’s Health System’s acquisition of the Saltzer Medical Group, a 41-physician multi-speciality group, including 16 adult primary care physicians located in Nampa, Idaho. Among the key issues in the litigation were geographic market definition, the likely impact on reimbursement rates and whether the acquisition would enable a more integrated healthcare delivery system that would improve healthcare quality and efficiency. 

More detailed findings of fact and conclusions of law were filed under seal to give the parties and third parties an opportunity to object to the disclosure of any material that they deem to be sensitive and confidential. 

In the memorandum decision and order, the court recognised that St Luke’s strategy to deliver more integrated care through utilising primary care physicians as care co-ordinators would lead to improved care in the Treasure Valley, but the court concluded that this more integrated care could be achieved through means other than acquisition of the Saltzer physicians…

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