FTC files complaint to stop merger of Sanford Health, Mid Dakota Clinic
From staff reports
The Federal Trade Commission and the North Dakota attorney general are working to block Sanford Health’s proposed acquisition of Mid Dakota Clinic.
Sanford and the group of physicians announced plans to merge in September 2016. On Wednesday, the organizations said they signed an agreement as one of the final steps, planning to finalize the partnership as soon as possible.
The FTC alleged Thursday that the deal would violate antitrust law by significantly reducing competition for services in the Bismarck and Mandan metropolitan area.
According to a news release from the FTC, the agency and the attorney general’s office filed a complaint in federal district court seeking a temporary restraining order and preliminary injunction to stop the deal until the case is heard. That administrative trial is scheduled to begin Nov. 28.
Sanford and Mid Dakota officials said in a news release that the delay is “extremely frustrating.”
“The best way to describe our reaction is that we are exasperated with the delay that the FTC’s inquiry has already caused, and that these proceedings will continue to cause,” said Dr. Shelly Seifert, chair of Mid Dakota Clinic’s board. “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.”
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.
“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 transaction would create a group of physicians with a 75 percent or greater share in the provision of adult primary care physician services, pediatric services, and obstetrics and gynecology services. It would be the only physician group offering general surgery physician services in the affected area, according to the complaint.
Sanford said in a news release that the two health care organizations used national, legal and economic experts to evaluate all aspects of the partnership. That analysis leads them to believe that the FTC and attorney general “have their facts and legal arguments wrong.”
“We intend to vehemently defend our efforts to enhance medical care in central and western North Dakota,”said Dr. Craig Lambrecht, executive vice president of Sanford Bismarck. “This partnership is good for patients, the community, and anyone who would come to us in their time of need. We are honestly shocked that the FTC and attorney general would continue to deprive people of access to enhanced medical care for an unknown period of time. It just doesn’t make any sense.”
Sioux Falls-based Sanford Health is one of the largest health systems in the nation with 45 hospitals and almost 300 clinics in nine states and four countries. Sanford Health’s 28,000 employees, including more than 1,300 physicians, make it the largest employer in the Dakotas.
Mid Dakota Clinic is a large multispecialty practice with over 90 providers and over 400 staff. It has five locations with nine clinics in Bismarck.
