Micron health plan shows flaws of St. Luke's expansion, lawyers say

adutton@idahostatesman.comSeptember 27, 2013 

Lawyers cite Micron Technology’s experience with a health plan supports the argument that a St. Luke’s Health System takeover of a Nampa physician practice would harm competition.

Micron’s health plan came up this week in St. Luke’s antitrust trial in federal court in Boise. The federal government, the state of Idaho, Saint Alphonsus Health System and Treasure Valley Hospital are suing St. Luke’s to unwind its purchase of Saltzer Medical Group in Nampa.

Micron, one of Boise’s largest employers, built its own slate of health-care providers in 2008 to save money. Micron hired a company called Imagine Health to set up the plan. The plan’s goal was to steer patients to providers who would accept lower payments in exchange for Micron employees’ business.

Some doctors used by Micron employees left the network after St. Luke's Health System bought their practices, an Imagine Health employee testified.

"We had been informed by Micron on a couple of occasions that St. Luke's has expressed to them that they were not willing to work with Imagine Health," said Jackie Butterbaugh, who creates health-care provider networks for employers. Butterbaugh said no reason was provided.

After St. Luke's bought the Boise Orthopedic Group, Micron "had to go out independently and look for orthopedic practices in the community." Micron was "not 100 percent satisfied" with the doctors it found, Butterbaugh said.

A lawyer for Saint Alphonsus cited the Micron experience in his opening statement Monday behind closed doors.

The lawyer, David Ettinger, said Micron employees still want doctors who are now employed by St. Luke’s and aren't part of the Micron network. The employees must pay more out-of-pocket to see them — a $40 copay instead of a $15 or $30 copay for Micron-contracted doctors.

"Today Micron is seeking alternative bids to replace a program in which they have saved $27 million a year," said Ettinger, whose statement was released to the public Thursday.

Butterbaugh said about 90 percent of Micron employees' hospitalizations today are at Saint Alphonsus, compared with 70 percent at St. Luke's before the network was created. Her video deposition was played Thursday in front of U.S. District Judge B. Lynn Winmill.

St. Luke’s said the Micron experience proves its point that St. Luke’s lacks the power to raise prices above competitive levels.

"The sensitivity to small price differentials demonstrated by Micron employees makes it implausible to believe that other patients would not choose non-St. Luke’s physicians to avoid higher copayments," St. Luke's said in an earlier court brief. "Thus, an attempted above-competitive price increase by St. Luke’s in Nampa could be defeated."

St. Luke's opponents are making their case this week and next. After they’re done, St. Luke's will get two weeks to present its side.

Not every practice St. Luke's bought pulled out of the Micron network, Butterbaugh said. St. Luke's Capital City Family Medicine and Idaho Family Physicians are among those that stayed.

Saltzer joined the largest, most expensive tier of the Micron network in January 2011.

Other employers have joined Micron’s network, according to documents filed in the lawsuit. One is Wal-Mart, with 1,500 employees in Ada and Canyon counties.

Home Depot considered joining but hasn’t, in part because Home Depot human resources employees are judged by the "noise," or complaints, from workers about issues such as losing access to a doctor, according to Butterbaugh’s testimony.

Audrey Dutton: 377-6448

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