Unraveling Secrets When Hospital Buys Physician Practice

Pricing contracts between device manufacturers and their hospital customers aren’t the only transactions in healthcare where pricing transparency is lacking. It’s also hard to get financial information when large health systems attempt to acquire physician practices.

According to healthjournalims.org, news organizations in Idaho are asking a federal appeals court in San Francisco to unseal pricing information that health insurers pay to hospitals and providers in an antitrust lawsuit over Boise, Idaho-based St. Luke’s Health System’s acquisition of a physician group named Saltzer Medical Group.

In March 2013, the Federal Trade Commission (FTC) and the Idaho attorney general sought to unwind the acquisition of the 44-member Saltzer physician group based in Nampa, Idaho. Before the health system completed the acquisition on December 31, 2012, Saltzer was the largest independent, multispecialty physician practice group in the state. A not-for-profit health system, St. Luke’s owns and operates seven hospitals, the FTC said.

The FTC and the attorney general’s office joined a lawsuit filed by two of St. Luke’s competitors: Saint Alphonsus Health System and a small surgical hospital in Boise. The competitors sued in November 2012 alleging antitrust violations. St. Luke’s and Saltzer moved to keep all the pricing data sealed before the start of the trial. The news organizations filed their request for transparency after the trial judge refused to consider argument for keeping the information sealed.

Audrey Dutton of the Idaho Statesman reported last October that the documents reveal details about the acquisition, compensation that St. Luke’s and its main rival proposed for independent doctors and other particulars about the Saltzer purchase.

Molly Gamble reported in Becker’s Hospital Review that the news organizations claimed more than half of the first seven days of testimony occurred behind closed doors and more than 575 exhibits were sealed.

The case could define how antitrust regulators view hospital acquisitions of doctor practices for years to come, according to Modern Healthcare. Although the FTC seeks to identify anti-competitive deals involving hospitals and doctors, the trial in Boise marked the first time the agency has litigated such a deal in a courtroom, the news magazine said.