District Court Blocks Hospital Acquisition of a Physician Practice, Concluding That Anticompetitive Effects Outweigh Potential Quality and Efficiency Gains From Consolidation

In the first ever FTC-litigated challenge to a hospital system’s acquisition of a physician group, the U.S. District Court for Idaho ruled in favor of the plaintiffs (the FTC, Idaho Attorney General, and St. Alphonsus, a competing hospital system). The plaintiffs challenged St. Luke’s Health System’s acquisition of the Saltzer Medical Group, a 41-physician multi-specialty group, including 16 adult primary care physicians located in Nampa, Idaho. Among the key issues in the litigation were: geographic market definition, the likely impact on reimbursement rates, and whether the acquisition would enable a more integrated healthcare delivery system that would improve healthcare quality and efficiency.

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