Despite increasing healthcare consolidation, FTC remains wary

More than 50 percent of hospitals plan to acquire a physician practice this year, compared to 44 percent last year, according to a new worldwide survey from healthcare staffing company Jackson Healthcare.

The 118 hospital administrators surveyed said the move is opportunistic, rather than strategic. Also driving their decision to acquire practices is the need to build, or maintain, a competitive advantage, and to attract physician recruits.

Family practice, general internal medicine, OB/GYN and other primary care lead the list of specific practices hospitals aim to acquire, according to Jackson Healthcare.

In light of these findings, hospitals still have something to be wary of--the Federal Trade Commission. On Tuesday, the commission sued to prevent Idaho's largest hospital group from acquiring the state's largest physician group, the latest hospital deal to be under the scrutiny of the FTC, according to Reuters.

The antitrust complaint was filed in Idaho federal district court, aiming to block Boise-based St. Luke's Health System's acquisition of Saltzer Medical Group, which specializes in family practice, internal medicine and pediatrics.

How come? "The combination of St. Luke's and Saltzer would give it the market power to demand higher rates for health care services provided by primary care physicians in Nampa, Idaho and surrounding areas, ultimately leading to higher costs for health care consumers," the FTC said in a statement, Reuters noted.

General counsel for St. Luke's, Christine Neuhoff, pointed out that while the Centers for Medicare & Medicaid Services is encouraging integration, the FTC sees it as consolidation and not a means for better patient care, according to the article.

Industry experts argue that hospital mergers and the monopolies they create are causing healthcare costs to rise, without an improvement in quality, according to a recent panel hosted by the American Enterprise Institute in Washington, D.C. Panelist Martin Gaynor contended that the more than 1,000 healthcare mergers and acquisitions since 1994--980 in 2011 alone--is muffling competition and allowing higher prices.

To learn more:
- read the Jackson Healthcare report
- read the Reuters article