Louisiana's University Health files antitrust suit against competitor

Editor's Note: An earlier version of this story incorrectly identified the plaintiff in the lawsuit as "United Health;" we regret the error.

Shreveport, Louisiana-based University Health System (UH) this week filed a federal lawsuit accusing its competitor, Willis-Knighton Medical Center, of violating federal antitrust laws in its agreement with Louisiana State University.

The lawsuit alleges that Willis-Knighton plans to take advantage of an agreement with LSU, UH-Shreveport's clinical partner, to hijack UH's business from commercially-insured patients and eventually take over the hospital. If the take over occurs, the suit claims it would give Willis-Knighton enough of a market share to create an illegal monopoly, as well as increasing prices for health plans, employers and patients.

Willis-Knighton disputed the allegations in a statement to FierceHealthFinance. "For many years, beginning long before [UH's] management contract, WK has had agreements with LSU and area physicians, at their request, to assist in providing healthcare services through community clinics across our community," the statement reads. "The agreements have provided vital healthcare resources and, as [UH] should know, the clinics are not taking patients from [UH] or advancing WK's market position. The agreements were and are for one purpose only--providing quality healthcare to needy patients and families that are seeking services currently at WK."

Vantage Health Plan also joined the lawsuit, accusing Willis-Knighton of refusing to "reasonably contract" with the insurer. The lawsuit also cites passages from Willis-Knighton CEO James Ellrod's book "Breadcrumbs to Cheesecake" that tout the provider's strategy of obtaining higher reimbursements through a "critical mass" of hospitals.

These reimbursements come "on the back of Louisiana citizens," Steve Skrivanos, chair of UH-Shreveport's board of directors, said in a press conference Thursday. Both the book and the lawsuit claim the provider's dominance enables it to charge several times more than providers in other parts of the state, Vantage CEO and Chief Medical Officer Gary Jones said during the press conference.

In the past few years, Jones added, UH's Shreveport and Monroe campuses, which primarily serve low-income patient populations, have made major improvements in patient outcomes. The move by Willis-Knighton could threaten those improvements.

"On three occasions, Willis-Knighton has used its acquisition of physician practices to contribute to the failure of a competitive hospital environment and extend its market influence," Skrivanos said. He also cited a 2013 claim by Ellrod that Willis-Knighton could not purchase UH for fear of antitrust challenges. "[Willis-Knighton] is trying to do indirectly what it admitted it cannot do directly," he said.

Antitrust laws are a major concern amid a wave of consolidation within the hospital sector. In one of the highest-profile examples, a federal judge ruled St. Luke's Health System violated antitrust laws in its acquisition of Saltzer Medical Group, the state's largest independent physician's practice.

To learn more:
- read the lawsuit (.pdf)