- The Ninth Circuit on Tuesday upheld the ruling that St. Luke's Health System had violated antitrust laws in its purchase of Saltzer Medical Group, the state's largest physician practice.
- Judge Andrew D. Hurwitz wrote in his opinion that while the merger might result in improved patient outcomes, that was not sufficient to justify approval of the acquisition. "At most, the district court concluded that St. Luke's might provide better service to patients after the merger," Hurwitz wrote. "That is a laudable goal, but the Clayton Act does not excuse mergers that lessen competition or create monopolies simply because the merged entity can improve its operations."
- As of Tuesday afternoon, it is not known if St. Luke's will appeal of the decision.
This is the same old song-and-dance between providers, who claim consolidation will improve efficiencies and therefore cut system costs and improve outcomes, and a skeptical FTC. Hurwitz's decision is one the industry will likely hear echoed in similar cases.
"The gist is, healthcare markets can be local," David Ettinger of Honigman Miller Schwartz and Cohn, which represents St. Luke's competitor St. Alphonsus, told Fierce Healthcare. "If one party has a high-market share, it can indicate serious antitrust problems when higher prices can be achieved. The mere claim that the efficiencies you are going to get as a result of a transaction doesn't trump it."