Seventeen law professors from across the country are urging a federal appeals court to rehear the antitrust case against Idaho's St. Luke's Health System.
The professors filed a friend-of-the-court brief on Monday with the 9th U.S.Circuit Court of Appeals asking it to grant St. Luke's request for a rehearing before a full panel of judges. Earlier this year, a three-judge panel of the court decided against St. Luke's, saying its acquisition of Saltzer Medical Group in Nampa, Idaho, was anti-competitive.
“Antitrust law should properly recognize efficiencies and allow defendants to demonstrate efficiencies under the same burden that plaintiffs have in making out a prima facie case,” according to the brief. The brief goes on to say that the professors, along with the International Center of Law and Economics, with which it filed the brief, “are concerned that the decision of the Panel in this case will prevent or undo beneficial mergers and thereby have adverse effects on consumer welfare.”
Many are watching the case closely because it's the first case the courts have handled involving a hospital system's practice acquisition challenged by the Federal Trade Commission. The case also epitomizes a major tension in healthcare now—the pressure on providers to consolidate without running afoul of antitrust laws. Providers say consolidation is necessary to achieve higher quality care at lower costs.
St. Luke's argued that its acquisition of the physician group would help it improve care, but the three judge panel ruled in February that such an argument wasn't enough to keep the system from violating antitrust laws. The court said St. Luke's failed to show the deal wouldn't harm competition.
In their new brief, the professors argue that the court should have taken St. Luke's arguments about the acquisition improving quality more into consideration when making their decision.
The professors say the panel's positions on that argument were “inconsistent with modern antitrust jurisprudence and economics, which treat improvements to consumer welfare as the very aim of competition and antitrust laws.”
They also argue that the decision, if not reversed, could have a chilling effect on provider integration and collaboration.
“If the Panel's decision is upheld providers will be considerably less likely to engage in realignment aimed at improving care and lowering long-term costs,” according to the brief. “As a result, both patients and payors will suffer in the form of higher costs and lower quality of care.”
Plaintiffs in the case—which include the FTC, the state of Idaho and St. Luke's competitors St. Alphonsus Health System and Treasure Valley Hospital—had argued the acquisition would lead to higher prices.