Lawsuit targets St. Luke’s acquisition attempt

Originally published by Idaho Statesman: September 24, 2013

BOISE, Idaho — Federal Trade Commission attorneys have said Boise-based St. Luke’s Regional Medical Center will control almost 80 percent of the primary care providers in Nampa if its purchase of another medical group is allowed to stand.

The attorneys made the arguments to a federal judge on Monday during opening statements in a lawsuit between the FTC, Boise-based Saint Alphonsus Health System and St. Luke’s, the Idaho Statesman (http://bit.ly/16ESAmF) reported

The lawsuit stems from a buyout of Nampa-based Saltzer Medical Group that gave St. Luke’s a foothold in Canyon County health care. The FTC and Idaho attorney general argue the buyout was an illegal market-grab, giving the health system a nearly 80 percent share of primary care in Nampa.

Saint Alphonsus and a smaller surgical hospital say the buyout will decrease their revenues as Saltzer physicians stop sending patients to St. Luke’s competitors.

Tom Greene, lead attorney for the FTC, said St. Luke’s is essentially buying a referral system by acquiring the doctor group.

He told U.S. District Judge B. Lynn Winmill that St. Luke’s offered Saltzer doctors a double-digit boost in pay and planned to earn the money back by charging higher rates, leading to higher premiums. Attorneys for St. Alphonsus and the FTC also point to the Twin Falls region, where St. Luke’s employs most physicians and prices have increased significantly.

St. Luke’s attorney Jack Bierig told the judge that prices increased for a variety of legitimate reasons in the Twin Falls area. He also said the Saltzer deal would help St. Luke’s launch a new health insurance product and help low-income and uninsured patients get preventative care and while providing other benefits.

St. Luke’s attorney Christine Neuhoff added in an interview that the deal would put more financial risk on St. Luke’s to work efficiently and not perform wasteful operations or tests.

Winmill asked few questions, but he pressed Bierig on how likely it is that St. Luke’s will actually lower prices and make great strides in health care that it couldn’t make without owning Saltzer.

There’s no guarantee that will happen, Bierig said. But “the antitrust (law) should not nip our efforts in the bud,” he said. “This is so not pie in the sky. This is not even pie. This is reality, right here on planet Earth.”