US regulators win antitrust case against St. Luke's Health System and Saltzer Medical Group

January 24
10:54 PM 2014

US regulators looking to heighten antitrust enforcement in healthcare acquisitions won a major victory against the biggest hospital chain in Idaho and a doctor group after a federal judge ruled that the two must undo their merger, Bloomberg reported.

US District Judge B. Lynn Winmill in Boise, Idaho ruled that the consolidation of St. Luke's Health System Ltd and the Saltzer Medical Group would increase consumer prices even if it would enhance patient care. She made the decision on two cases lodged by the Federal Trade Commission and local hospitals, the report said.

Winmill ordered that the two must unwind their consolidation. In her decision, she wrote: "There are other ways to achieve the same effect that do not run afoul of the antitrust laws and do not run such a risk of increased costs."

Although the regulator has been actively running after hospital deals it views as anticompetitive, the Idaho which was only won after a court room battle showcased the FTC's new drive to prevent doctor group acquisitions by hospitals. In 2012, a similar complaint was settled by the agency over the purchase of two Nevada cardiology groups, the report said.

In a phone interview, Arnall Golden Gregory LLP antitrust attorney and former FTC lawyer Jeffrey Jacobovitz told Bloomberg that the decision will encourage the agency in its efforts to deal with doctor group acquisitions as well serve as a precedent on how to treat other mergers.

Jacobovitz said, "It's a unique case, it's an expansion of what they've been doing in the health care arena and they won. It's major a victory by the FTC."

Meanwhile, antitrust lawyer David Balto told Bloomberg in an interview that the decision could be seen as a clash to President Barack Obama administration's efforts to overhaul the healthcare system which promotes the reduction of fragmentation of medical care to enhance quality. Balto said, "This is going to raise really difficult questions about the kind of integration that's envisioned by the Affordable Care Act."

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