To Sell, or Not to Sell? Antitrust Laws Still in Question on Hospital/Physician Integration

Earlier this year, PAMED reported on a federal district court decision that highlighted an important legal consideration for hospitals looking to acquire medical practices and physicians looking to sell to them—the arrangement could go against state and federal antitrust laws.

The decision involved an antitrust challenge to the acquisition of an Idaho physician practice – Saltzer Medical Group – by the St. Luke’s Health System. The federal court ruled that the acquisition violated the antitrust laws.

A key finding was that the acquisition resulted in St. Luke’s having a dominant position in its market (with 80 percent of the primary care physicians), which was likely to increase health care costs.

However, the Ninth Circuit Court of Appeals has now stayed (put on hold), pending resolution of the health systems appeal, the district court’s order requiring the health system to divest the medical practice.

Stayed tuned for further updates on this case, which addresses the boundaries between hospital and physician integration that results in substantial market power.