A complaint filed in district court claims the acquisition would compromise competition and thus quality of care, while thwarted physician organizations argue the opposite.
The acquisition of Mid Dakota Clinic by Sanford Health, originally announced in September 2016, has been put on hold indefinitely following a complaint filed by the Federal Trade Commission and North Dakota Attorney General, alleging the deal would violate antitrust law.
According to the complaint, Sanford and Mid Dakota are each other’s closest rivals in the four-county Bismarck-Mandan region of North Dakota, an area with a population of 125,000.
Completion of the merger, the FTC and AG argue, would nearly eliminate competition for adult primary care physician services, pediatric services, obstetrics and gynecology services, and general surgery physician services in the greater Bismarck and Mandan metropolitan area.
“This merger is likely to reduce significantly the competitive options available to medical insurance providers, which in turn will lead to deteriorating terms for provision of medical care, including higher prices and lower quality,” said Tad Lipsky, acting director of the FTC’s Bureau of Competition. “The parties currently compete to join commercial insurers’ provider networks, stimulating each other to improve their technology, expand services, recruit high-quality physicians and provide patients with convenient and accessible physician and surgical services. The transaction would eliminate that competitive pressure.”
The physician organizations responded with shock and frustration, jointly stating that they used national, legal, and economic experts to evaluate all aspects of the partnership—leading them to believe that the FTC and AG have their facts and legal arguments wrong.
“It is very disappointing because patients rely on us to continually look for ways to enhance care, improve quality and expand service and access for them and their families. That’s exactly what this merger does,” said Shelly Seifert, MD, board chair of Mid Dakota Clinic, which employs 61 physicians and 19 advanced practice practitioners and operates six clinics in Bismarck, as well as a Center for Women and an ambulatory surgery center.
“We intend to vehemently defend our efforts to enhance medical care in central and western North Dakota,” added Craig Lambrecht, MD, executive vice president of Sanford Bismarck, a subsidiary of Sanford Health that operates a 217-bed general acute care hospital and a network of primary care and specialty clinics, employing 160 physicians and 100 non-physician healthcare providers in the Bismarck-Mandan area.
Debra Shute is the Senior Physicians Editor for HealthLeaders Media.