Saint Al's says Saltzer referrals dropped by half since St. Luke's buyout

June 6, 2014 

The largest competitor of St. Luke's Health System is telling a federal judge that its business from a physicians’ group slowed after St. Luke's acquired the group — and that the drop-off worsened after the judge ruled the purchase illegal.

U.S. District Judge B. Lynn Winmill ruled in January that St. Luke's broke federal antitrust laws when it bought Saltzer Medical Group in Nampa. He ordered the businesses to split up.

St. Luke's has since asked to keep Saltzer while it undertakes a lengthy appeal of Winmill's decision. Winmill has yet to rule on that request.

Saint Alphonsus Health System, a rival that belongs to the national Catholic hospital organization CHE Trinity, was one of several entities that sued St. Luke’s. Saint Alphonsus argued the deal would curtail competition for primary-care services in the Nampa area. As employees of St. Luke's, Saltzer doctors would stop sending patients to its rival's hospitals and doctors, Saint Alphonsus lawyers argued.

St. Luke's denied all those claims. Some executives and physicians maintain that St. Luke's does not pressure or offer incentives to its doctors to keep patients within the St. Luke's system. Instead, a Saltzer-owned by St. Luke's would continue admitting patients to the nearby hospital — Saint Alphonsus Medical Center in Nampa — and refer patients to the best doctors, regardless of affiliation, they said.

The opposite has happened, Saint Alphonsus alleged in court documents filed Friday that urge Winmill to deny St. Luke's request to keep Saltzer during the appeal.

An executive for Saint Alphonsus said in the recently filed court documents that when he compared the number of Saltzer patients who came to Saint Alphonsus for outpatient care — services that don't involve an overnight, 24-hour hospital stay — he found a drop of more than 55 percent since the Saltzer deal closed at the end of 2012.

"I am unaware of any events that could have caused this decline other than decisions or referrals by the Saltzer physicians, their staffs or other St. Luke's personnel," wrote Lannie Checketts, chief financial officer of Saint Alphonsus Medical Center—Nampa.

"The change in Saltzer's referral patterns provides compelling evidence that St. Luke's will not forego anticompetitive behavior pending appeal," wrote attorneys for Saint Alphonsus and co-plaintiff Treasure Valley Hospital.

But the referrals aren't so black and white, said Dr. John Kaiser, an OB/GYN who is president of Saltzer Medical Group.

"There are so many other factors that play a role in outpatient cases," Kaiser told the Statesman. "I don't think it's fair to select one area of service that you have seen decline. ... We have never directed patients, and St. Luke's has never asked us to."

One example is maternity and baby care.

Saint Alphonsus has moved its Nampa maternity care to a new hospital at I-84 and Garrity Boulevard, Kaiser said. As a result, Saltzer doctors stopped delivering babies at Saint Alphonsus in February. The new center is too far away for Saltzer doctors to safely oversee deliveries there, he said.

Saint Alphonsus also hired a group of nurse practitioners to provide newborn care that Saltzer used to provide, Kaiser said.

But Saint Alphonsus attorney David Ettinger said those examples and others cited by Kaiser fail to explain the change. Maternity generally is inpatient care — not outpatient — and the nurse practitioners were hired to staff an inpatient newborn ICU that didn't exist before, Ettinger said.

When Checketts took out pediatricians and obstetricians from the referral data, the decline was even more stark, he said. Referrals from all Saltzer doctors fell 37 percent in the first four months of this year, compared with the same time in 2013. Without the child and mother specialties, the decline was 43 percent, Ettinger said.

Kaiser said the group's own data contradicts the Saint Alphonsus allegations.

The number of patients Kaiser sends to Saint Alphonsus still outnumbers those it sends to St. Luke's, he said. The change between now, and pre-St. Luke's, is "basically insignificant," he said.

Even though Saltzer patients have a "strong preference" for St. Luke's when asked to pick, they usually end up at Saint Alphonsus anyway, because it's closer and more convenient, he said.

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