The Federal Trade Commission and the Idaho attorney general will file an antitrust challenge to try to unravel the 3-month-old acquisition of the state's largest physician practice by its biggest health system. But the healthcare providers are not backing down from the deal.
Boise-based St. Luke's Health System acquired Saltzer Medical Group, based in Nampa, on Dec. 31, despite being warned by state officials to delay the deal because it could potentially harm competition for primary-care physician services in the area around Nampa. The commission voted 4-0 on Tuesday
to file a complaint to block the deal, and the Idaho attorney general's office will join the lawsuit in federal court.
Regulators across the country have kept vigilant watch as hospitals have been acquiring physician practices at a rapid rate, but the challenge announced Tuesday was the rare case in which the government signaled it would take its concerns to court.
Rarer still, the healthcare providers are not backing down. Dr. David Pate, president and CEO of St. Luke's, said in a blog post that he felt the decision to challenge the health systems' acquisition was peculiar because no regulator has actually found that St. Luke's or Saltzer has done anything wrong.
“The FTC can still file a complaint because you are in a position where you might be able to violate the law in the future,” Pate wrote on his blog
. “We are extremely disappointed by the FTC's and AG's decision to file suit. It became clear recently that the FTC and AG don't well understand hospital-physician relationships and do not have a good understanding of accountable care.”
St. Luke's Clinic Coordinated Care was named an accountable care organization
by the CMS in January.
FTC Competition Bureau Director Richard Feinstein said in a written statement that the acquisition of Saltzer makes it difficult for insurers to create a viable network of physicians that can compete with St. Luke's and keep costs down, since St. Luke's now owns 60% of the Nampa market for primary care.
“The result of the acquisition will be higher prices for the services that those physicians provide, with costs ultimately passed on to Nampa employers and their employees,” Feinstein said in the release.
St. Luke's is already facing private antitrust litigation
from a competing health system, Boise-based St. Alphonsus Health System, which is owned by Trinity Health, based in Livonia, Mich. The FTC said it will file its lawsuit in the same court, and will ask the judge to consolidate the two cases.