Editor’s Note :There may be disagreements over the relative clout of insurance companies and hospitals but there can be little disagreement over the clout of the FTC.

The following set of articles is drawn from a series of stories written by the Idaho Statesman; The articles are very informative in that they describe in non-technical terms the issues associated with mergers.

 The FTC goes head-to-head with a long time associate of the Editor when both worked in the Pentagon during the Johnson Administration; an individual who is nationally recognized as an expert in healthcare.

 Testimony in hospital antitrust case wraps up

Idaho Statesman

BOISE, Idaho (AP) – Testimony in a federal antitrust lawsuit pitting two of Idaho’s biggest health care providers has wrapped up.

Related Articles from the Idaho Statesman

Economist: St. Luke’s deal must happen

The Federal Trade Commission, the Idaho attorney general, Saint Alphonsus Health System and Treasure Valley Hospital are suing St. Luke’s for its acquisition last year of Nampa-based Saltzer Medical Group, which employs dozens of doctors. The plaintiffs accuse St. Luke’s of breaking laws that protect competition, claiming the buyout gave St. Luke’s control of almost 80 percent of the primary-care market in Nampa.

The two sides are arguing over several points, including how far patients travel for health care, whether St. Luke’s truly needs to own Saltzer to accomplish a medical-pricing overhaul, and whether the St. Luke’s-owned Saltzer doctors will send patients only to St. Luke’s providers, harming local competitors. A health care expert urged a federal judge to let St. Luke’s keep a Nampa medical group.

By AUDREY DUTTON — adutton@idahostatesman.com

Idaho’s largest health system, which employs hundreds of doctors, must grow larger to make any big strides toward lowering health care costs in Idaho, an economist testified Tuesday in the antitrust trial against St. Luke’s Health System.

Alain Enthoven, a retired Stanford University business professor who focuses on health care, testified as an expert witness for St. Luke’s, which was sued by rivals and the state and federal governments over its purchase of what had been Idaho’s largest independent physician practice, Saltzer Medical Group.“St. Luke’s wouldn’t die without them,” Enthoven told U.S. District Court Judge B. Lynn Winmill. But its ability to become an integrated, efficient system is hindered if St. Luke’s cannot own Saltzer, he said.

St. Luke’s is hoping to convince Winmill that it is on a path to achieving lofty goals — better health care at a lower cost — but needs to own Saltzer to accomplish those goals.Its plan includes a new health insurance contract that is intended to allow St. Luke’s eventually to receive rebates from premiums unspent because of efficiency savings. That money would be passed on to high-performing doctors as a reward, St. Luke’s officials say.The buyout would have other positive outcomes, Enthoven said.“I think if St. Luke’s can carry out their plan, that will have a very big competitive impact in Idaho,” he said. It could prompt other Idaho health-care providers, including rival Saint Alphonsus Health System, to “form a defensive alliance against St. Luke’s, and then compete … (based on) better quality and lower cost,” he said.

Two health systems now dominate the Treasure Valley market. The Saltzer deal has increased the primary care market concentration in Nampa — how much so, and whether Nampa is its own market, is up for debate.Winmill asked Enthoven if he believes market concentration is a concern, but that health care industry problems are “critical enough that perhaps risks need to be taken” anyway. Enthoven said yes.St. Luke’s is paying Enthoven $600 an hour for his work, not contingent upon winning the lawsuit, according to Enthoven’s testimony.Enthoven was on the stand for the entirety of Tuesday’s six-hour session, which focused partly on how many doctors St. Luke’s should have on its payroll. Enthoven said full-service, integrated health care systems need 60 primary-care doctors for every 100,000 people in a community.

Not all of them would need to be employed, he said.He cited several studies showing that independent doctors and loosely aligned medical organizations give patients worse care.He said St. Luke’s needs more doctors with financial ties to the system to abandon a status quo that drives up costs with poor or needless care. As things are now, health care providers earn more if they fumble lab tests, perform unnecessary surgeries or allow people to develop chronic illnesses, he said.Under today’s fee-for-service payment system, hospitals including St. Luke’s now have a strong incentive to keep “heads in beds” — admitting patients for costly hospitalization — and no incentive to keep people healthy, because people with serious chronic illnesses are the “geese that lay the golden eggs” of revenue, he said

.Attorneys for the Federal Trade Commission and Saint Alphonsus sought to poke holes in Enthoven’s testimony.

They suggested that Enthoven:• Had little experience doing data-heavy research of his own.

• Relied on studies that were several years old and that raised concerns about physician buyouts raising prices.•

Failed to fully examine Idaho’s health-care marketplace to see if St. Luke’s initiatives are already being tried by other organizations.

WHAT’S NEXT?Testimony continues Wednesday, when St. Luke’s attorneys plan to bring in a board member to explain the system’s decision-making process, among other things. The trial will, originally scheduled to end Friday, will run through Monday to make up for a one-day hiatus last week. Closing arguments are scheduled in November.Read more here: http://www.idahostatesman.com/2013/10/16/2817600/economist-st-lukes-deal-must-happen.html#storylink=cpy

By David Staats — dstaats@idahostatesman.comMore than half of the plaintiffs’ testimony in the antitrust trial of St. Luke’s Health System was closed to the public, ostensibly to protect trade secrets. Some documents filed before the trial are shielded, too. Consider a deposition from a plaintiffs’ witness, Ed Castledine, a St. Luke’s executive who supposedly told Nampa’s Saltzer Medical Group in 2009 that if Saltzer didn’t join with St. Luke’s, the health system would bring physicians to the Nampa area to compete with Saltzer.

The transcript shows Castledine being sworn in and questioned by Federal Trade Commission lawyer Thomas Greene about his job duties. Greene then turns to the matter at hand:Q. I’m showing you a document marked Exhibit 1277. This is captioned “Integrated Analysis Update,” dated April 23, 2010. … Do you recognize this document?A. I think I do, yes. Q. Good. There on the first page, and throughout, some handwritten notes. Is that your handwriting?A. I believe it is.

Read more here: http://www.idahostatesman.com/2013/10/15/2815574/this-column-for-attorneys-eyes.html#storylink=cpy

Witnesses reject St. Luke’s assertions

AUDREY DUTTON Idaho_StatesmanFacebook  

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

By AUDREY DUTTON — adutton@idahostatesman.com
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 trialAudrey Dutton: 377-6448, Twitter: @IDS_Audrey

Read more here: http://www.idahostatesman.com/2013/10/22/2827557/witnesses-reject-st-lukes-assertions.html#storylink=cpy

St. Luke’s trial wraps up with witnesses trying to debunk St. Luke’s claims

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 By Audrey Dutton — adutton@idahostatesman.com
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 health-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,” he said.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 provided 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 is 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

Read more here: http://www.idahostatesman.com/2013/10/21/2827459/st-lukes-trial-wraps-up-with-witnesses.html#storylink=cpy

Hundreds of documents shielded in hospital lawsuit 

Associated Press

Trial records from an anti-trust lawsuit between two Boise hospitals and the Federal Trade Commission show hundreds of documents are being hidden from public view under laws designed to protect trade secrets.The Idaho Statesman (http://bit.ly/ts2JbV) reports that the documents, marked “Attorney’s Eyes Only,” reveal details of St. Luke’s Health System’s purchase of the Saltzer Medical Group in Nampa as well as compensation packages.

The purchase is at the heart of the lawsuit from rival Saint Alphonsus Regional Medical Center and the FTC against St. Luke’s. Saint Alphonsus and the FTC say the purchase gives St. Luke’s an unfair market share and will raise health care prices for consumers; St. Luke’s counters that the purchase gives patients better care and will allow the company to create more lower-cost health care options for consumers.The lawsuit trial is now in its fourth week in Boise’s U.S. District Court. Last week attorneys involved in the case gave Judge B. Lynn Winmill lists of emails, meeting minutes, reports and statements they want to keep quiet.

Some of the lists are more than 24 pages long. The documents include financial terms of possible integrations with several practices, noncompetition agreements doctors signed as part of their employment with St. Luke’s and emails comparing fees between the two hospitals.Before the trial began, Winmill allowed businesses to hide certain categories of documents from public view, and said lawyers for the businesses could empty the courtroom when presenting sensitive information.

That resulted in the first several days of the trial being held behind closed doors, and several news organizations including The Idaho Statesman and The Associated Press filed a motion to intervene to make the trial and the evidence public.Winmill ruled that documents and testimony involving “trade secrets” would remain secret. But he said attorneys must review the items that were already marked confidential and offer compelling reasons to keep the business secrets private over the public’s well-established right to know.

The newly released summaries of documents were in response to Winmill’s order.

 

Documents, testimony offer clues to Saltzer’s  Price

    Witness statements, emails and court records offer clues to St. Luke’s investment in the Nampa physicians’ practice.

By Audrey Dutton — adutton@idahostatesman.com
Two doctors who joined St. Luke’s Health System in a 2012 buyout of their Nampa practice, Saltzer Medical Group, testified Friday about their reasons for joining the larger organization.Pediatrician Thomas Patterson’s voice cracked as he talked about giving children the best health care possible instead of worrying about making enough money to sustain an independent group.

That’s something he fears will be impossible if U.S. District Judge B. Lynn Winmill decides the buyout violated antitrust laws and orders St. Luke’s to release Saltzer.“I’m closer than ever to [getting] out of this rat race that I was warned about” early in his career, said Patterson, who has practiced for about 15 years.His coworker Harold Kunz, a family doctor, then testified that Saltzer would face crushing debt if made independent again. A lawyer for Saint Alphonsus Health System — one of four organizations suing St. Luke’s over the deal — countered that by showing a video of Kunz saying he believed financial insolvency was a “doomsday scenario.”

Later, Kunz’s testimony and lawyers’ statements helped answer a different question: How much did St. Luke’s pay for the Nampa practice?Kunz told the court that St. Luke’s offered Saltzer a deal that, in terms of money, was “virtually identical” to what Saint Alphonsus offered in January 2012, after some of Saltzer’s doctors decided to shop around before deciding to sell to St. Luke’s.That means it is likely that St. Luke’s offered around $27 million to $29 million for Saltzer.According to emails and other documents, a consultant for Saint Alphonsus said on Jan. 23, 2012, that Saltzer’s medical practice was worth $6.7 million to $7.7 million, counting employees and intangible assets but excluding tangible assets such as medical equipment.

The consultant also estimated salaries, including $13.5 million for an expected 49 full-time doctors and more than $10 million for almost 300 full-time support staffers.Saint Alphonsus offered Saltzer a range of options on Jan. 31, 2012, including:• A five-year agreement for Saltzer physicians to work for Saint Alphonsus, with guaranteed compensation of $19 million for 49 doctors in the first two years. Saint Alphonsus would pay a one-time lump sum of $8 million to $9.8 million for Saltzer’s assets and nonphysician employees.Saltzer now is under this style of contract — known as a physician-services agreement — with St. Luke’s.• A five-year agreement for the doctors to work for Saint Alphonsus, while the practice itself would remain independent. Saint Alphonsus would pay a management fee for billing and day-to-day operations.

The offer included $16 million in guaranteed doctor pay for the first two years and a one-time payment of $2.9 million to $3.4 million for the doctors.• A joint-equity deal allowing Saint Alphonsus to buy a majority share in Saltzer — an estimated $6.5 million for 51 percent of stock — and have a seat on Saltzer’s governing board. All Saltzer employees, compensation plans and operations would stay the same. The health system would have the option to buy the whole practice over a certain period.• A total buyout, which Saint Alphonsus assumed was off the table unless Saltzer wanted to talk about it.• An affiliation that could offer “a variety of medical directorships, joint ventures and co-management opportunities.” One pitch was for Saltzer to join the Saint Alphonsus Health Alliance, a clinically integrated system being formed at the time.The nonfinancial terms were different from St. Luke’s, though, and Kunz said they made all the difference in his decision to favor St. Luke’s. Saint Alphonsus initially wanted the Saltzer doctors to sign a noncompete agreement with a 90-mile radius.

The system later offered to “waive” its noncompete contract for Saltzer doctors, but Kunz said the request alone damaged his trust.The group eventually took the St. Luke’s package, and the deal closed in December. Some of Saltzer’s doctors, including high-revenue surgeons, left to join Saint Alphonsus about the same time.Court documents reference some kind of financial assistance St. Luke’s would provide to help Saltzer survive a breakup of the deal.

The details came out Friday while Kunz was under cross-examination: St. Luke’s had paid about $9 million that Saltzer physicians can keep if Winmill orders the two businesses to separate.An attorney for St. Luke’s then said he thought that information was supposed to be sealed by an “attorneys’ eyes only” rule — not for the public or competing businesses to know.•••

Read more here: http://www.idahostatesman.com/2013/10/18/2822604/documents-testimony-reveal-saltzers.html#storylink=cpy

By Audrey Dutton

Two doctors who joined St. Luke’s Health System in a 2012 buyout of their Nampa practice, Saltzer Medical Group, testified Friday about their reasons for joining the larger organization.Pediatrician Thomas Patterson’s voice cracked as he talked about giving children the best health care possible instead of worrying about making enough money to sustain an independent group.

That’s something he fears will be impossible if U.S. District Judge B. Lynn Winmill decides the buyout violated antitrust laws and orders St. Luke’s to release Saltzer.“I’m closer than ever to [getting] out of this rat race that I was warned about” early in his career, said Patterson, who has practiced for about 15 years.His coworker Harold Kunz, a family doctor, then testified that Saltzer would face crushing debt if made independent again.

A lawyer for Saint Alphonsus Health System — one of four organizations suing St. Luke’s over the deal — countered that by showing a video of Kunz saying he believed financial insolvency was a “doomsday scenario.”Later, Kunz’s testimony and lawyers’ statements helped answer a different question: How much did St. Luke’s pay for the Nampa practice?Kunz told the court that St. Luke’s offered Saltzer a deal that, in terms of money, was “virtually identical” to what Saint Alphonsus offered in January 2012, after some of Saltzer’s doctors decided to shop around before deciding to sell to St. Luke’s.

That means it is likely that St. Luke’s offered around $27 million to $29 million for Saltzer.According to emails and other documents, a consultant for Saint Alphonsus said on Jan. 23, 2012, that Saltzer’s medical practice was worth $6.7 million to $7.7 million, counting employees and intangible assets but excluding tangible assets such as medical equipment. The consultant also estimated salaries, including $13.5 million for an expected 49 full-time doctors and more than $10 million for almost 300 full-time support staffers.Saint Alphonsus offered Saltzer a range of options on Jan. 31, 2012, including:•

A five-year agreement for Saltzer physicians to work for Saint Alphonsus, with guaranteed compensation of $19 million for 49 doctors in the first two years. Saint Alphonsus would pay a one-time lump sum of $8 million to $9.8 million for Saltzer’s assets and nonphysician employees.Saltzer now is under this style of contract — known as a physician-services agreement — with St. Luke’s.•

A five-year agreement for the doctors to work for Saint Alphonsus, while the practice itself would remain independent. Saint Alphonsus would pay a management fee for billing and day-to-day operations. The offer included $16 million in guaranteed doctor pay for the first two years and a one-time payment of $2.9 million to $3.4 million for the doctors.• A joint-equity deal allowing Saint Alphonsus to buy a majority share in Saltzer — an estimated $6.5 million for 51 percent of stock — and have a seat on Saltzer’s governing board. All Saltzer employees, compensation plans and operations would stay the same. The health system would have the option to buy the whole practice over a certain period.• A total buyout, which Saint Alphonsus assumed was off the table unless Saltzer wanted to talk about it.•

An affiliation that could offer “a variety of medical directorships, joint ventures and co-management opportunities.” One pitch was for Saltzer to join the Saint Alphonsus Health Alliance, a clinically integrated system being formed at the time.The nonfinancial terms were different from St. Luke’s, though, and Kunz said they made all the difference in his decision to favor St. Luke’s. Saint Alphonsus initially wanted the Saltzer doctors to sign a noncompete agreement with a 90-mile radius. The system later offered to “waive” its noncompete contract for Saltzer doctors, but Kunz said the request alone damaged his trust.The group eventually took the St. Luke’s package, and the deal closed in December.

Some of Saltzer’s doctors, including high-revenue surgeons, left to join Saint Alphonsus about the same time.Court documents reference some kind of financial assistance St. Luke’s would provide to help Saltzer survive a breakup of the deal. The details came out Friday while Kunz was under cross-examination: St. Luke’s had paid about $9 million that Saltzer physicians can keep if Winmill orders the two businesses to separate.An attorney for St. Luke’s then said he thought that information was supposed to be sealed by an “attorneys’ eyes only” rule — not for the public or competing businesses to know.•••

Read more here: http://www.idahostatesman.com/2013/10/18/2822604/documents-testimony-reveal-saltzers.html#storylink=cpy

TheJudge scolds press for delay in filing in St. Luke’s trialPublished

Audrey Dutton Idaho_Statesman

 He says media groups waited too long to challenge an order that put much of the case off limits to the public.

By Audrey Dutton — adutton@idahostatesman.com

A federal judge in Boise said Friday that news organizations put him in a bind by taking too long to challenge his order allowing hundreds of documents and dozens of hours of testimony to take place outside of public view. U.S. District Court Judge B. Lynn Winmill called the delay “egregious” in an order that reaffirmed his oral instructions last week giving the news media some, but not most, of what they sought. Winmill is hearing a lawsuit against St. Luke’s Health System by its main competitor, Saint Alphonsus Health System, along with Treasure Valley Hospital, the Federal Trade Commission and Idaho Attorney General Lawrence Wasden.

They say St. Luke’s broke antitrust laws when it bought Saltzer Medical Group in Nampa last year.The week before the trial began, Winmill said the businesses could keep “trade secret” testimony and documents hidden from the public and from in-house attorneys for other businesses. He cited the need to protect sensitive information that competitors could use against those businesses. Health insurance companies and local employers are among the companies providing financial and strategic information in the case.

The courtroom was closed for much of the trial’s first week. Lawyers redacted or sealed most documents and witness transcripts.News groups including the Idaho Statesman, the Associated Press, the Times-News in Twin Falls, the Idaho Press-Tribune in Nampa and the Idaho Press Club filed a motion Oct. 2 seeking access to everything in the trial. Their lawyer, Charles Brown of Lewiston, argued that Winmill had not required the businesses to show a “compelling reason” why the need to keep proceedings secret trumped the public’s right to know.“By the time the [businesses] responded [to the challenge] and oral argument was held, more than two weeks of trial had transpired,” Winmill wrote. “The late filing was especially egregious because the court set forth its plan in a pretrial order … so that representatives of the media would have an opportunity to file a pretrial motion to intervene and challenge the plan.”

Idaho Statesman Editor Vicki Gowler said the Statesman sought legal help as soon as it realized how serious the problem was. The Statesman later asked other news organizations to join in its challenge.“We hired an attorney on the second day of the trial to challenge the ‘attorneys’ eyes only’ order — as soon as we realized how much of the trial was being held behind closed doors,” Gowler said. “We assumed the judge would evaluate what testimony and exhibits would be kept from the public. Instead, it became clear very quickly that attorneys were making those decisions with little attention paid to the ‘compelling reason’ standard.”Brown filed the challenge in the middle of the trial’s second week. Friday marked the end of its fourth week. Testimony is expected to end Monday.Brown said in an emailed statement:

“When Judge Winmill criticizes the timing of the press’s motion, it must be remembered that it is his job to act as gatekeeper to [ensure] that constitutional rights and safeguards are met and rigorously applied before he shuts the doors to his courtroom or allows the sealing of depositions or exhibits.”The businesses taking part in the trial said previously that certain information must be kept under wraps. For example, they said such a guarantee was critical to third parties such as Blue Cross of Idaho and Primary Health Medical Group, who did not initiate the litigation but whose information makes up a large part of the evidence Winmill is considering.Winmill’s decision was partly in favor and partly against the news groups’ request to see and hear all court proceedings.

He told lawyers for the plaintiffs, defendants and third-party witnesses to review each item they had designated “attorneys’ eyes only” and cite the reason for the designation. He said the court also would review the designations. The news groups are considering whether to appeal to the U.S. Court of Appeals for the 9th Circuit.

Read more here: http://www.idahostatesman.com/2013/10/18/2822566/judge-scolds-press-for-delay-in.html#storylink=cpy

Hundreds of documents in St. Luke’s antitrust trial are closed to public

Audrey Dutton Idaho_Statesman
 By Audrey Dutton — adutton@idahostatesman.com

Participants in the St. Luke’s antitrust trial are shielding hundreds of documents in the case from public view under laws designed to protect trade-secrets, trial records show.The documents, marked for “attorneys’ eyes only,” reveal details of St. Luke’s Health System’s purchase of Nampa’s Saltzer Medical Group, compensation packages that St. Luke’s and its main rival proposed for independent doctors and other details that could shed light on financial motivations for the Saltzer purchase, which is at the heart of the case against St. Luke’s.Summary descriptions of the sealed documents say they cover the prices of St. Luke’s services, internal discussions about relationships between St. Luke’s and independent local medical practices, expansion plans for the Treasure Valley and negotiation strategies with health insurers, among other things.

The U.S. District Court trial is now in its fourth week. Rival Saint Alphonsus Health System, small Boise surgical center Treasure Valley Hospital, the Federal Trade Commission and the Idaho attorney general all say St. Luke’s acquisition of Saltzer has given St. Luke’s too much control over the primary-care market in Nampa. St. Luke’s says the acquisition is an essential piece of its campaign to make local health care more efficient and cost-effective.This week, attorneys on both sides and outside witnesses gave Judge B. Lynn Winmill lists of emails, meeting minutes, reports and statements they want to keep private. Some lists are more than 25 pages long. The documents include: Financial terms and executive summaries of proposed integrations with several practices, including Boise Orthopedic Clinic, The Women’s Clinic and Intermountain Orthopaedics.
Noncompetition agreements doctors signed as part of their employment with St. Luke’s.

Internal emails about how Luke’s could achieve its “triple aim” of better care, healthier people and lower costs; its plans to integrate clinics; and its “strategy for competing and adding services in Canyon County and responding to Saint Alphonsus’ plans.”
Options for “potential restructure of relationship” between St. Luke’s and Primary Health Medical Group, an independent Treasure Valley group.
Demographic data to help St. Luke’s executives plan for the system’s Idaho service areas: the Treasure, Magic and Wood River valleys and McCall.
Saint Alphonsus emails that compare its fees with St. Luke’s charges.
Before the trial began, Winmill allowed businesses to hide certain categories of documents from public view and said lawyers for the businesses could decide to empty the courtroom so that only certain attorneys could see or hear sensitive evidence. As a result, the first week of the trial was conducted largely behind closed doors. Transcripts were released days later with extensive redactions.

Several Idaho news groups then filed a motion to pry open the courtroom and evidence. Winmill then ruled that “trade secrets” would stay secret. But attorneys must review, piece by piece, what they had already marked confidential, he said. He said lawyers would have to offer a compelling reason for business secrets to trump the public’s well-established right to know.

The newly released summary descriptions were a response to Winmill’s oral order.After giving the documents a second look, at least one lawyer — Brian Julian for Saltzer Medical Group — decided to lift the veil on several exhibits. It was not immediately clear how the public and press could access those now-unsealed documents.