FTC, Hospital Buyout Battle

FTC, hospitals buyout battle

The Federal Trade Commission (FTC) and hospitals are on opposite sides of the battlelines in a growing conflict over whether or not the hospitals should be allowed to buy large doctors’ practices. American Medical News published a report Monday conducted by Jackson Healthcare which found that 52 percent of the 118 hospitals in their survey were planning to buy some doctors’ practices in 2013. That’s up from the already significant 44 percent who bought doctors’ practices in 2012.

The reason? Money. Almost sixty percent of the hospital administrators said that the buyouts would give them a competitive edge or help them maintain a competitive advantage they already enjoyed in their communities.

But money is also the reason that the FTC is worried. In March, they partnered with the Idaho Attorney General to file a lawsuit to block St. Luke’s Health System, Ltd. from buying the largest doctors’ practice group in the Nampa, Idaho region. Although the deal already closed in Dec. 2012, the FTC wants to stop the merger from going forward.

They stated that the acquisition was illegal bcause it was anticompetitive when it “created a single dominant provider of adult primary care physician (adult PCP) services in Nampa, with the combined entity commanding nearly a 60 percent share of that market.”

In the year-long investigation of the case before filing the lawsuit, the FTC discovered that St. Luke’s, despite being a nonprofit, wanted to demand higher rates for health care. Once the merger is complete, patients might have limited opportunity to find lower-priced health care options in their community.

In a Becker’s Hospital Review report, also published today, reporter Molly Gamble provided a comprehensive survey of four other similar cases where the FTC is fighting the mergers.

Gamble said that the FTC is aggressively fighting buyouts that give hospitals too much control of a market. However, she also noted that the FTC doesn’t always win, especially in cases where a deal has already closed.

The St. Luke’s hospital buyout may well go through, even against the FTC’s wishes.

[hospital photo courtesy Timothy Smith and the US Navy via Wikipedia Commons]