Witnesses reject St. Luke’s assertions

As testimony ended in the antitrust trial, experts sought to refute the health system’s arguments for buying Nampa’s biggest medical practice.

adutton@idahostatesman.comOctober 22, 2013 

The clock ran out Monday on a trial scheduled to last exactly 5,340 minutes. Lawyers for St. Luke’s Health System and its opponents raced to make final points about the system’s multimillion-dollar acquisition of the Saltzer Medical Group last year.

The Federal Trade Commission and Saint Alphonsus Health System called witnesses who rebutted St. Luke’s claims that owning Saltzer is critical to the system’s plans to improve health care and control rising insurance costs.

David Dranove, a health industry management and strategy professor at Northwestern University, rejected an argument by a St. Luke’s economist that patients will simply leave a health system if that system raises prices above competitive levels.

“We just can’t expect pricing pressure to be imposed by patients,” he said. Patients may not pay attention to prices paid by insurers and whether those prices have risen, he said. Those who do may discover it’s hard to shop around for a cheaper doctor, he said.

Dranove said that if St. Luke’s is allowed to keep Saltzer and employ its more than 40 doctors, “We’ll be stuck with a dominant provider with none of the benefits” that St. Luke’s has promised.

Kenneth Kizer, a former emergency doctor and a former undersecretary for health in the U.S. Department of Veterans Affairs, downplayed the assertions by St. Luke’s executives that the system is on track to make transformational changes to health care.

“There’s nothing special St. Luke’s is doing that isn’t being done elsewhere in the country,” he said. The system’s “quality claims are speculative and not merger-specific.”

Kizer pointed to industry studies and reports that, he said, cast doubt on whether St. Luke’s can achieve its goals. A key study found that independent doctor groups provide higher-quality, lower-cost care than hospital-employed groups.

But later, a St. Luke’s lawyer dug up that study and pointed to sentences that seemed to contradict Kizer’s assertions and to support St. Luke’s theory of primary-care focused integration.

More than 25 lawyers were in court for Monday’s session. Many are health care antitrust specialists flown in from Chicago, Detroit, California and Washington, D.C. They spent the past four weeks sparring before U.S. District Judge B. Lynn Winmill, with an occasional dust-up over time limits or surprise witness testimony — only to talk and laugh with their rivals when court was in recess.

Before he left, Winmill praised both sides for the “absolute highest quality of lawyering that I saw in this courtroom,” adding that he wished the press and public could have been present for the entire trial, since “it truly was of the first order.”

The trial ran several minutes longer than the time Winmill alloted. Lawyers will return to the courtroom Nov. 7 for closing arguments. Winmill could issue his verdict before Christmas.

Click here for complete coverage of the trial

Audrey Dutton: 377-6448, Twitter: @IDS_Audrey

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