FTC to Challenge Physician Group Acquisition in North Dakota
July 13th, 2017
The Federal Trade Commission (FTC) and the North Dakota Office of the Attorney General have jointly filed suit in federal district court to block the acquisition of Mid Dakota Clinic by Sanford Health. The two groups are competitors in greater Bismarck, an area with a population of 125,000.
The complaint states that the merger will reduce competition for a variety of physician services that each group now provides. Allegedly, the merger would lead to the combined entity having at least a 75% share of the primary care market. Additionally, according to the FTC, the combined group would be the only provider of physician surgical services in the area.
Sanford Health is a multinational healthcare system that operates a 217-bed acute care hospital and primary care and specialty clinics in the Bismarck area. Mid Dakota operates seven clinics in Bismarck and owns an ambulatory surgery center.
The case is significant because it is emblematic of the vertical acquisitions that the FTC has been reviewing recently. Healthcare systems are eager to merge with physician practices and other healthcare entities to increase referrals, increase inpatient admissions, and improve efficiencies.
Regulators are concerned that vertical integration of this kind will lead to a reduction in the competitive options available to insurance providers, leading to higher prices and lower quality care.
Robert B. Vogel, MD, JD
Retinal Ophthalmologist at Piedmont Eye Center, Lynchburg VA;
Attorney, Overbey Hawkins & Wright, PLLS, Lynchburg, VA;
Adjunct Professor, Humanities and Bioethics, Liberty University School of Medicine, Lynchburg, VA.
