The Antitrust Challenge to the St. Luke's/Saltzer Medical Group Transaction: Implications for Hospital/Physician Consolidations

On January 24, 2014, the Federal Trade Commission (FTC), along with the Idaho Attorney General and two local hospitals, prevailed in Idaho District Court in their challenge to the St. Luke's Health System's acquisition of a group of physicians in Nampa, Idaho. As the first litigated FTC challenge to a hospital acquisition of a physician practice, the outcome was highly anticipated. The 4-week trial was litigated by experienced lawyers on all sides and involved extensive testimony from both fact witnesses and experts on everything from market definitions to the efficiencies from forming a more tightly integrated healthcare system. The case raises a number of important questions about the competitive analysis of hospital-physician consolidations, including: the appropriate geographic market for physician services; whether competitive effects in adjacent product markets were properly considered; and whether claimed efficiencies were "merger specific." In the attached article, Bob Leibenluft and Leigh Oliver discuss Judge B. Lynn Winmill's decision in the case and its implications for further efforts by hospitals to acquire physician practices.

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