Government Sues Over St. Luke's Acquisition Of Nampa Practice

Mar 13, 2013

Credit St. Luke's

The Treasure Valley’s largest healthcare provider reacted Tuesday to a decision from the Idaho Attorney General’s office and the Federal Trade Commission to sue over a deal the agencies think would stifle competition. 

The transaction in question is St. Luke’s buyout of the Saltzer Medical Group in Nampa.  After examining the deal and potential impacts for months, the FTC and Attorney General Lawrence Wasden decided the acquisition of the Saltzer practice would give St. Luke’s too much control over the local market, and therefore would lead to higher prices.  The Idaho Attorney General’s office alleges the deal would break state law. 

“St. Luke’s acquisition of Saltzer Medical Group has created a dominant single provider of adult primary care physician services in Nampa, with a nearly 60 percent share of the market,” said Richard Feinstein, director of the FTC’s Bureau of Competition.  “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.”    

Christy Neuhoff, an attorney for St. Luke’s, says the hospital was “extremely disappointed” with the decision.   

“We had made some significant efforts to provide both agencies with what we believed would be a solution that would assure that the harm they fear could occur, would not occur,” she says.  “And that was apparently not sufficient to prevent them from feeling a need to file the complaint.” 

Neuhoff says the type of deal St. Luke’s is trying to execute would help streamline operations and make healthcare more affordable.

“The fragmented way in which providers have been operating is a large part of what has led to the healthcare cost crisis we’re in now,” she says. 

Luke's CEO, Dr. David Pate, contends in a blog post that the government’s decision to try and block the deal runs counter to efforts to overhaul healthcare by improving outcomes and lowering prices. He also contends the FTC and the attorney general “don’t well understand hospital-physician relationships."

The suit filed today in federal court is separate from a private lawsuit filed last year by Saint Alphonsus and Treasure Valley Hospital. A trial for that complaint is scheduled for July 29.

Saint Alphonsus issued a statement following the announcement.  It read simply “Saint Alphonsus is pleased that the FTC and Idaho Attorney General are taking this enforcement action.”

Raymond Powers, an attorney representing Treasure Valley Hospital, issued this statement:  "It is apparent that the FTC and Idaho AG have, through their independent investigations, concluded that St. Luke’s conduct requires intervention and action on both the state and federal level.  TVH believes such action is appropriate and necessary to address the anticompetitive conduct of St. Luke’s."

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