Two of Idaho’s largest health care systems will commence a monthlong battle in federal court this week, with federal and state governments joining Saint Alphonsus Health System in a lawsuit to stop St. Luke’s Health System from owning a large physician practice that used to be independent.
The fight is more than a year in the making. It will determine the future of health care in Canyon County, and it also might be a game-changer for health care in Idaho, where St. Luke’s executives say they plan more growth and consolidation in the name of better health care, healthier people and lower costs.
WHAT CAUSED THIS FIGHT?
Boise-based St. Luke’s has been acquiring physician practices and hospitals for several years. It ramped up its buyouts under the leadership of CEO David Pate, a doctor and lawyer who moved to Boise from Houston four years ago to run the system. The system now includes seven hospitals, more than 70 clinics and medical offices, and about 11,000 employees in Idaho and eastern Oregon. Five years ago, St. Luke’s owned four hospitals and employed about 7,600 people.
But St. Luke’s isn’t being sued over growing too much. Though it is the dominant health care provider in places such as the Magic Valley — where the system’s legal opponents argue its dominance caused a spike in health care prices — its overall growth in recent years is just the background scenery for this lawsuit.
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Instead, a single acquisition drew the scrutiny of the Federal Trade Commission and Idaho Attorney General Lawrence Wasden: a buyout of Nampa-based Saltzer Medical Group, which was the largest independent practice in the state.
Both Wasden and the FTC are in charge of enforcing federal and state antitrust laws that protect competition so that consumers can shop around.
Wasden’s office first asked, then warned, both businesses not to close on the deal until the FTC and Wasden had finished investigating whether St. Luke’s was breaking the law. St. Luke’s decided that might take years, so it pressed on.
Date: September 22, 2013