U.S. District Judge B. Lynn Winmill made the ruling Friday, ordering St. Luke's Health System to undo its buyout of the Nampa-based Saltzer Medical Group.
The ruling came in a lawsuit between St. Luke's, Saint Alphonsus Regional Medical Center and the Federal Trade Commission. The FTC and Saint Alphonsus Regional Medical Center contended the buyout was an illegal market grab and gives St. Luke's an unfair advantage. But St. Luke's countered the acquisition will allow it to improve patient care and launch new medical plans designed to help low-income and uninsured patients.
Winmill said that it's likely the buyout would raise health care costs because it would give St. Luke's a dominant market position.
"The acquisition was intended by St. Luke's and Saltzer primarily to improve patient outcomes. The Court is convinced that it would have that effect if left intact, and St. Luke's is to be applauded for its efforts to improve the delivery of health care in the Treasure Valley," Winmill wrote. "But there are other ways to achieve the same effect that do not run afoul of the antitrust laws and do not run such a risk of increased costs. For all of these reasons, the acquisition must be unwound."
St. Luke's spokesman Ken Dey said in a prepared statement that the company was extremely disappointed by the ruling, and that health system officials anticipate an appeal. He said St. Luke's continues to focus on providing better coordination of care and outcomes for patients while managing costs.
"While our business relationship with Saltzer Medical Group may change, St. Luke's remains committed to working collaboratively with Saltzer," Dey wrote in the statement.
Idaho Attorney General Lawrence Wasden, who also was a party in the lawsuit, said in a prepared statement that he was pleased with the ruling and believes it is good news for Treasure Valley residents.
"We now look forward to working with St. Luke's Health System and the Saltzer Medical Group in carrying out all that is required in the judge's decision," Wasden wrote.
Documents and testimony indicate St. Luke's offered $27 million to $29 million for Saltzer, with the practice's doctors keeping about $9 million whether or not the merger stands up to legal challenges.
Many hours of witness testimony and hundreds of documents were sealed from the public because they were said to contain trade secrets. The U.S. Court of Appeals for the Ninth Circuit is now considering a lawsuit by Idaho news outlets, including the Idaho Statesman and The Associated Press, to unseal evidence and trial proceedings.