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Update on the FTC Investigation: a Disappointment, but No Deterrent to Right Solutions

By Dr. David C. Pate, News and Community
March 12, 2013

I am writing with an update on the investigation by the Federal Trade Commission (FTC) and the Idaho Attorney General’s Office.

We learned late yesterday that the FTC and the AG have decided to file a complaint in federal court against St. Luke’s. This action is related to the lawsuit filed by Saint Alphonsus and Treasure Valley Hospital to undo the affiliation of Saltzer Medical Group with St. Luke’s.

The FTC and AG are apparently concerned that St. Luke’s relationship with Saltzer could put us in a position to improperly use market power to raise prices above competitive levels at some point in the future, not that we have already done so or even intend to do so.

This is an interesting peculiarity under the antitrust law, unlike other laws, where despite no finding of having broken any laws, and no determination that the party intends to do anything wrong, the FTC can still file a complaint because you are in a position where you might be able to violate the law in the future. 

We are extremely disappointed by the FTC’s and AG’s decision to file suit. It became clear recently that the FTC and AG don’t well understand hospital-physician relationships and do not have a good understanding of accountable care. 

These are issues that I have been writing about on my blog for more than a year now. They are the solutions that Dr. Don Berwick, former administrator of the Centers for Medicare and Medicaid Services, spoke to us about a year ago at our St. Luke's Health System Summit. 

St. Luke’s remains fully committed to our strategy of putting together a coordinated health care delivery system, like the Mayo Clinic and other integrated systems, because we know that such a system will improve care for our patients, help to contain costs, and ensure better health outcomes for the people we serve.

Intervention by the FTC and the AG seems directly contrary to the goals of health care reform to develop physician-hospital systems in which providers can work as an integrated team to improve outcomes and reduce costs. In fact, fragmentation of the health care delivery system has been repeatedly identified as an inefficient manner to provide health care and a contributor to unnecessary duplication and waste. 

We cannot achieve these goals of better health, better care, and lower costs without a critical mass of physicians who share our vision and want to work to deliver care most efficiently in order to make care affordable for more Idahoans. 

We believe in our strategy to align with doctors and other providers to transform health care. We believe that by working together, giving doctors the flexibility to spend time to find new ways to improve health, improve care, and lower costs, we are fulfilling our commitment to the people we serve; and despite the fact that we are still early on this journey, we believe we already have evidence to show that what we are doing is working.

We are determined to move forward because we know that meaningful quality enhancements, patient care improvements, and cost control will not happen unless we innovate.

It is exasperating that while some areas of our government are encouraging integration as necessary to address the fragmentation that has led to our current health care cost crisis, the FTC and AG prefer to relegate the people of Canyon and Ada counties to that broken model. We believe we can make positive change, and we refuse to settle for the old approaches that we know have led to this country’s health care crisis while others hope to perpetuate the status quo for as long as possible.

We are disappointed in the action of the FTC and the AG, but it does not change our commitment to innovate to provide better care for the people of our region at a lower cost. As an Idaho-based, community-owned and governed health system, we owe that to our community.

We are thankful for our communities’ commitment to St. Luke’s and our vision to transform health care to benefit our families and our region. These are difficult times; we value and are grateful to our many friends and supporters.

 

 

About The Author

David C. Pate, M.D., J.D., is president and CEO of St. Luke's Health System, based in Boise, Idaho. Dr. Pate joined the System in 2009. He received his medical degree from Baylor College of Medicine in Houston and his law degree from the University of Houston Law Center.