St. Alphonsus Medical Center v. St. Luke’s Health System (Summary)

ANTITRUST

St. Alphonsus Medical Center v. St. Luke’s Health System., No. 1:13-CV-00116-BLW (D. Idaho Jan. 24, 2014)

The United States District Court for the District of Idaho ordered a health system to divest itself from a physician group it had acquired, finding that the acquisition violated the Clayton Act and the state anti-competition law.  The hospital system’s acquisition of a medical group made it the dominant provider in the area for primary care, giving it significant bargaining leverage over health insurance plans.  The Federal Trade Commission, the State of Idaho and a competing health care system brought suit against the health system, claiming a violation of antitrust laws.

The court subsequently unsealed detailed findings of fact and conclusions of law supporting its decision.  Among other things, the court rejected the defendant’s assertion that efficiencies associated with hospital-physician integration and the change from fee-for-service to risk-based reimbursement outweighed the possible anti-competitive effects of the high market share percentage in the market for physician services resulting from the acquisition.