Court says deal would increase costs
The federal district court judge considering the antitrust allegations against St. Luke's Health System based in Boise and Saltzer Medical Group (SMG) in Nampa made clear in his opinion that he thought the community would be better served by allowing the merger, but he found the merged group would wield too much power in the market.
B. Lynn Winmill, JD, chief judge of the United States District Court also was asked by the plaintiffs to require St. Luke's to notify the Federal Trade Commission in advance of any future physician practice acquisitions, but he said that action was inappropriate. His opinion explains that the antitrust laws essentially require the court to predict whether the deal under scrutiny will have anticompetitive effects.
"The Court predicts that it will," he wrote. "Although possibly not the intended goal of the Acquisition, it appears highly likely that healthcare 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."
Winmill goes on to acknowledge that 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 healthcare in the Treasure Valley," Winmill writes in the opinion. "But 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. For all of these reasons, the Acquisition must be unwound."