The state attorney general's office has asked St. Luke's not to complete the transaction until it can wrap up its lengthy investigation. Court records say the FTC has also sped up its ongoing investigation in the hopes of completing it before the transaction closes.
In an interview last week for a Modern Healthcare cover story about FTC scrutiny of healthcare deals, St. Luke's President and CEO Dr. David Pate said he believes the lawsuit from St. Alphonsus represents the beginning of a new trend where competitors take to the courts themselves rather than wait for regulators to step in and block deals.
“We are moving ahead on our transaction. The agencies have not stepped in to stop us, we have been working with them and are still under investigation. And then a competitor comes in and sues us,” Pate said. “I think we may see much more of this down the road, and it does slow you down. It is a very costly thing to go through for both parties, and it does slow you down.”
Pate noted that the federal government itself does things to encourage providers to expand through acquisitions, like spurring on the development of accountable care and demanding more efficiency, which are more easily accomplished by larger organizations.
However, Ettinger said judges in past hospital antitrust cases have not been swayed by those kinds of arguments, and he rejects the notion that evidence shows larger systems can more easily achieve efficiencies.
“The kinds of efficiencies St. Luke's claims relating to accountable care do not at all require physician acquisitions to be achieved, much less what we allege to be anticompetitive physician acquisitions,” he said. “A host of hospitals around the United States have gained clinical efficiencies and have been working to address accountable care issues, working with independent physicians. So we think that it is clear that there is no need to acquire physicians in order to gain these efficiencies.”