A federal appeals court on Tuesday denied St. Luke's Health System's request for a rehearing before a full panel of judges, raising the possibility that the system might take its widely watched antitrust fight to the U.S. Supreme Court.
"St. Luke's is very disappointed by the court's ruling announced today," the system said in a statement. "We will take some time to determine next steps.”
David Balto, an attorney who filed a friend-of-the-court brief supporting St. Luke's on behalf of 17 law professors, said he thinks it's a matter that could receive serious consideration by the Supreme Court if St. Luke's petitions the high court for a hearing.
“I would think that determining whether or not quality of care should be evaluated when you consider the competitive impact of a merger is a fairly significant concern,” Balto said.
David Ettinger, an attorney for one of the plaintiffs in the case, St. Alphonsus Health System, however, said the St. Luke's case presents no significant legal principle for the Supreme Court to resolve.
“We think that ought to end this, and we ought to get back to healthcare in Boise,” Ettinger said after the 9th U.S. Circuit Court of Appeals' decided Tuesday to deny rehearing.
St. Luke's had argued that its acquisition of Saltzer Medical Group in Nampa, Idaho, would help it improve care, but a panel of 9th Circuit judges ruled earlier this year that the deal was anticompetitive. It wasn't enough for St. Luke's to say the deal would improve care, and St. Luke's failed to show the deal wouldn't hurt competition, the court said.
Other plaintiffs in the case included the Federal Trade Commission, the state of Idaho and St. Luke's competitor Treasure Valley Hospital, also in Boise.
The case attracted national attention as the first litigation over an FTC case involving a hospital acquiring a physician practice. The case comes at a time when providers are increasingly interested in consolidation to improve coordination of care and lower costs.
Ettinger, however, said he believes the 9th Circuit's earlier ruling seems to say that improving care doesn't have to come at the expense of violating the law.
“There's a belief by some people that there's a tension between the goal of the Affordable Care Act and antitrust laws and I think what the court is saying is that's not true, that you can achieve the goals of the Affordable Care Act without making anticompetitive acquisitions,” Ettinger said.
He said St. Luke's recent argument for rehearing ignored the facts of the case presented during the trial that St. Luke's lost.
“It was demonstrated that the same efficiencies that St. Luke's hopes to achieve are being achieved without actually acquiring physicians," Ettinger said. "Hospitals and doctors can work together as a team to improve healthcare without the doctors being employed by the hospital.”
But Balto contends the case raises serious questions that the Supreme Court would do well to consider.
“You don't need a law degree or Ph.D. in economics to know making the assessment of whether a hospital merger is anticompetitive without considering issues of quality of care would be profoundly bad public policy, and it's also inconsistent with the law,” Balto said.
According to court documents filed Tuesday, the 9th Circuit panel of judges voted to deny a rehearing, and no member of the full court expressed a desire to vote on a potential rehearing.
St. Luke's had argued in its petition for rehearing that the 9th Circuit's decision conflicted with opinions of other circuit courts in a number of ways, including how it treated St. Luke's assertion that the acquisition would improve care.
