Physician Practice Group Acquisition Becomes Antitrust Casualty

    View Author January 2014

    Adding to the Federal Trade Commission’s (FTC) recent string of successful challenges to allegedly anticompetitive healthcare mergers and acquisitions, a federal district court in Idaho ruled on January 24, 2014 that St. Luke’s Health System’s (St. Luke’s) 2012 acquisition of the Saltzer Medical Group (Saltzer) violated §7 of the Clayton Act and the Idaho Competition Act and must therefore be unwound. According to the court, the acquisition resulted in St. Luke’s having 80% of the primary care physicians in the Nampa, ID area, making it the dominant provider of primary care and giving it significant bargaining leverage over health insurance plans. The court predicted that the acquisition would result in anticompetitive effects in the market by enabling the combined entity to negotiate higher reimbursement rates from health insurance plans that will then be passed on to the consumer, as well as raise rates for ancillary services, such as X-rays, to the hospital’s higher billing rates.

    In this publication you will find the key takeaways from the court’s decision and its practical application to healthcare providers.