Saint Al's says Saltzer deal hurt Nampa hospital

Referrals from the medical group have fallen since rival St. Luke's acquired it.

STATESMAN STAFFApril 22, 2014 

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The Saltzer Medical Group in Nampa.

DARIN OSWALD — doswald@idahostatesman.com Buy Photo

Even though St. Luke's Health System lost an antitrust lawsuit, its purchase of Nampa's Saltzer Medical Group already has had an effect, Saint Alphonsus' CEO says.

Sally Jeffcoat told Kaiser Health News that referrals from Saltzer doctors have fallen by 25 percent in the past year even though the Saint Al's hospital is 50 feet from Saltzer's door. St. Luke's bought Saltzer in December 2012 over the objections of Idaho Attorney General Lawrence Wasden, prompting the lawsuit last spring.

Saint Alphonsus, Treasure Valley Hospital in Boise, Wasden and the Federal Trade Commission joined forces to block the St. Luke's takeover of Saltzer. They said its purchase of the 43-physician group was anticompetitive and would lead to higher prices for Idaho patients. U.S. District Judge B. Lynn Winmill agreed in January, ordering the merger dissolved. St. Luke's plans to appeal and wants the dissolution postponed until the appeal is heard.

Jeffcoat told Kaiser that Saltzer is "our lifeblood."

"We had to preserve competition," she told reporter Phil Galewitz. "It would have devastated this hospital."

Referrals were an issue in the lawsuit, with each hospital system essentially saying the other benefited from more referrals - and hurt the competing system - whenever a health system bought a medical practice.

Winmill said the Saltzer purchase gave St. Luke's 80 percent of the primary care doctors in Nampa and would bring "significant bargaining leverage" over insurers.

Saint Alphonsus is a subsidiary of Trinity Health, an 86-hospital Catholic health system that had also sought to buy Saltzer.

St. Luke's said its purchase would enable more efficient, better-coordinated care that ultimately would save money. Winmill praised St. Luke's efforts to improve care but noted that Treasure Valley residents already pay "substantially more than the national average" for the care they get.

Other than Saint Al's, no one stood to lose more from the merger than Blue Cross of Idaho, the state's largest insurer, Kaiser Health News reported. Chief executive Zelda Geyer-Sylvia rejected St. Luke's CEO David Pate's argument that a larger St. Luke's would be better able to control costs.

"Consolidation has not been an effective way of reducing costs or providing more effective care," she told Galewitz. "People here have all the best intentions, but once you eliminate competition, it's gone."

St. Luke's officials told Galewitz that they had no plans to raise prices after the merger. Instead, they said they wanted to pursue a strategy in which the health system - not insurers - took the financial risk of coordinating patients' care and was rewarded for keeping them healthy and out of the hospital. They said that having salaried doctors would make it easier to share electronic health records, stream patient referrals and adopt treatment protocols.

"I want to transform health care, and we have taken concrete steps to do it. But we can't do this alone," Pate said.

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