St. Luke's economist: Saint Alphonsus can't prove it is harmed by Saltzer deal

An economist testified in federal court Thursday for St. Luke's Health System that his research casts serious doubt on the allegations by a rival that doctors cut off referrals to St. Luke's competitors when St. Luke's buys their practices.

Saint Alphonsus Health System is suing St. Luke's for purchasing Nampa-based Saltzer Medical Group last year. The systems have both hired economists to present data in the trial before U.S. District Court Judge B. Lynn Winmill.

Deborah Haas-Wilson, an economist for Saint Alphonsus, said in court earlier this month that referrals and admissions to Saint Alphonsus plummeted when independent doctors joined St. Luke's.

But the St. Luke's economist, David Argue, said Haas-Wilson failed to prove that Saint Alphonsus actually lost business — or referrals from St. Luke's primary-care doctors — as a result of buyouts.

The lawsuit hinges on the large share of primary-care doctors St. Luke's now employs in Nampa because of the Saltzer buyout.

Argue crunched numbers from Blue Cross of Idaho and Regence BlueShield of Idaho for five St. Luke's-acquired primary-care practices 12 months before a buyout and 12 months after a buyout.

Referrals from two of the practices fell by 3 percent and 12 percent, while those from the other three rose by 4 percent, 31 percent and 47 percent, he said.

At the same time, he said, referrals from Saint Alphonsus physicians to specialist groups fell by 13 percent to 47 percent after the groups joined St. Luke's.

Based on the referral data and other factors, Argue concluded that the Saltzer deal "is unlikely to create or enhance market power [but is] likely to lead to substantial pro-competitive benefits for the residents of southern Idaho."

Attorneys for the Federal Trade Commission and Saint Alphonsus questioned Argue's credibility — among other things, noting that he'd once said he "screwed up" some of his research and had to redo it.

The opponents also pointed out that Argue hadn't tried to forecast what would happen to the market after the acquisition. Instead, they said, he relied on historic trends and the market as it exists today.