FTC Thwarts Acquisition of Medical Group
A federal court halted the acquisition of a medical group by Boise, Idaho-based Salt Luke’s Health System in the Federal Trade Commission’s (FTC) first-time intervention of medical group acquisition by hospitals. The agency argued the acquisition by the regionally dominant healthcare provider violated anti-trust laws.
The case is a first as hospitals enthusiastically gobble up physician groups, a trend that has increased in recent years. St. Luke’s, the largest hospital system in Idaho’s Treasure Valley, which includes Boise and several other cities, sought to purchase Salzer Medical Group in nearby Nampa.
United States District Judge B. Lynn Winmill agreed with the FTC and local competitor St. Alphonsus Health System that by acquiring the group, the hospital system would control 80 percent of the primary care physicians in the Nampa area and have too much power with payers.
St. Luke’s responded that the deal would improve patient outcomes, and Winmill praised the health system for that. “St. Luke’s is to be applauded for its efforts to improve the delivery of healthcare in the Treasure Valley,” he wrote in his decision. “But there are other ways to achieve the same effect that do not run afoul of the antitrust laws and do not run such a risk of increased costs. For this reason, the acquisition must be unwound.”
St. Luke’s said it will appeal. Industry analysts are watching this case closely, as more and more healthcare systems absorb medical groups. Many are doing so to created integrated delivery networks to prepare for accountable care organizations (ACO) and other models.