Judge says St. Luke’s buyout violates antitrust law, must be undone
|By Audrey Dutton, The Idaho Statesman|
|McClatchy-Tribune Information Services|
U.S. District Judge
"The acquisition was intended by St. Luke's and Saltzer primarily to improve patient outcomes. The Court is convinced that it would have that effect if left intact, and St. Luke's is to be applauded for its efforts to improve the delivery of health care in the
The lawsuit accused St. Luke's of illegally thwarting competition in a way that would drive up prices for medical care in parts of
The health system said, essentially, that its opponents cherry-picked records and made specious arguments to foil a benevolent merger.
Winmill said in his ruling that while it may not have been the goal of the acquisition, it "appears highly likely that health care costs will rise as the combined entity obtains a dominant market position that will enable it to (1) negotiate higher reimbursement rates from health insurance plans that will be passed on to the consumer, and (2) raise rates for ancillary services (like x-rays) to the higher hospital-billing rates."
St. Luke's expects to appeal Winmill's decision, according to a statement from the health system Friday.
"This is a significant victory for the [
* Click here for the Statesman's past coverage of this trial, including live updates from the courtroom.
ACCUSATIONS AGAINST ST. LUKE'S
During a four-week trial last fall, two competing businesses --
Federal and state consumer-protection agencies also sued St. Luke's, saying it broke antitrust laws. The
Lawyers for the government pointed to internal emails and private conversations to suggest St. Luke's officials want to employ doctors to make more money and that Saltzer doctors didn't want to fight St. Luke's for the
ST. LUKE'S: BUYOUT HAS LONG-TERM REWARDS
St. Luke's executives and board members denied claims that the system tries to steer patients away from competitors. St. Luke's argued that other hospitals are doing fine and that they don't truly suffer a loss in overall business after St. Luke's buys independent practices. The health system also pointed a finger back at competitors, alleging they cut off referrals to doctors who join St. Luke's.
The system argued a
Lawyers for St. Luke's argued that the system's goal isn't to raise prices and make money. They said the system has persuaded previously independent doctors to accept lower payments from insurers and that it already has started paying some doctors based on performance.
REVEALED IN COURT
Documents and testimony indicate St. Luke's offered
Many hours of witness testimony and hundreds of documents were sealed from the public because they were said to contain trade secrets.
THE EFFECTS OF THIS RULING
The ruling shows there is legal power to the FTC's arguments that doctor buyouts can increase a hospital system's bargaining power with health insurers, leading to higher prices, said Lewis, who is not personally involved in the lawsuit.
"What all this means going forward is difficult to predict especially since St. Luke's has announced its intention to appeal the court's decision," Lewis said. "If St. Luke's ultimately decides to give up the ghost, or loses on appeal, it will be required as it has represented to the court in the past to reconstitute Saltzer as a standalone entity. What that all means and how it will do that is the big question. We are ultimately talking about people, not manufacturing plants."
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