Antitrust Law Daily Wrap Up, ANTITRUST—D. Ida.: Testimony concludes in challenge to Idaho physician group acquisition, (Oct 22, 2013)

By Jeffrey May, J.D.

Testimony in a nearly month-long trial, challenging the acquisition of Saltzer Medical Group—the largest physician practice in Idaho—by St. Luke’s Health System, Ltd—the largest health care system in that state—came to a close yesterday. Closing arguments are scheduled for November 7 in the case, brought by the FTC, the State of Idaho, and two complaining hospitals, seeking to undo the transaction (St. Alphonsus Medical Center—Nampa, Inc. v. St. Luke’s Health System, Ltd., Case 1:12-cv-00560-CWD; FTC v. St. Luke’s Health System, Ltd., Case 1:13-CV-00116-BLW, FTC File No. 121 0069).

Last year, Boise-based St. Alphonsus Health System, Inc. and Treasure Valley Hospital (TVH)—a nine-bed physician-owned, short-term care, non-emergency hospital in Boise—filed a complaint over St. Luke’s proposed acquisition of Saltzer Medical Group based in Nampa, Idaho. The acquisition was consummated after the federal district court denied a request for a preliminary injunction in December 2012. In March 2013, the FTC and the State of Idaho challenged the acquisition, seeking divestitures or a rescission of the transaction.

The government alleges that the combined entity will have market power in the Nampa region to demand higher rates for health care services provided by primary care physicians. Thus, the transaction is expected to drives up cost for health insurers and for Medicare.

On October 21, the federal district court in Boise heard from the plaintiffs’ rebuttal witnesses. St. Luke’s said that it wrapped up its case on October 18. That day, the court heard from an expert witness, Lisa Ahern, who discussed the financial impact on Saltzer if its acquisition by St. Luke’s were to be undone. The courtroom was closed during a portion of Ahern’s testimony

The testimony of the expert, who purportedly has extensive experience advising client about the financial impacts of hospital mergers, followed the court’s decision to deny a motion filed by the plaintiffs to exclude some aspects of her testimony. The plaintiffs unsuccessfully argued that Ahern lacked the requisite expertise to offer opinions on: (1) the ability of an unwound Saltzer to successfully recruit additional physicians; and (2) her opinion that an unwound Saltzer would be “far less competitive” in the event of a divestiture than it had been prior to its affiliation with St. Luke’s.

In concluding this stage of the proceedings, the court thanked the lawyers in the case for their efforts. There is still a possibility that the court might take additional testimony by video deposition or rebuttal in court near the end of the month, according to St. Luke’s.

A decision in the case is expected before the end of the year.

This is Case 1:12-cv-00560-BLW and Case 1:13-CV-00116-BLW.

Attorneys: David A. Ettinger (Honigman Miller Schwartz and Cohn LLP) and Keely E. Duke (Duke Scanlan & Hall, PLLC) for Saint Alphonsus Health System, Inc. Jason S. Risch (Risch Pisca, PLLC) for Treasure Valley Hospital. Peter Herrick for FTC. Brett T. DeLange, Office of Attorney General, for State of Idaho. Jack R. Bierig (Sidley Austin LLP) for St. Luke’s Health System Ltd. Brian Julian (Anderson, Julian & Hull LLP) for Saltzer Medical Group.

Companies: Saint Alphonsus Medical Center - Nampa, Inc.; Treasure Valley Hospital Limited Partnership; St. Luke’s Health System, Ltd.; Saltzer Medical Group, P.A.

Cases: Antitrust IdahoNews FederalTradeCommissionNews