Legal Matters

Legal Matters Top Antitrust Issues in Physician-Hospital Alignment

By Matthew C. Hans, J.D. Herbert F. Allen, J.D. Polsinelli, PC

Agreat realignment is underway among America’s doctors. The shift away from independent practice towards full hospital employment or affiliation with a hospital system has been motivated by growing costs for independent practices, including rising physician salaries, and flat or declining reimbursement. The antitrust laws will play an important role in determining how this wave of physician and hospital alignment will play out. Hospital Acquisition of Physician Practice – Reduction in Competition?

When a hospital acquires an independent physician practice or employs its doctors directly, the antitrust laws treat the transaction as a merger between the hospital and the physician practice. Antitrust concern arises when the combination of the newly-hired physicians with physicians already employed by the hospital creates new market power that may substantially lessen competition, or tend to create a monopoly in violation of Section 7 of the Clayton Act.

But how do courts and agencies determine whether or not an acquisition that has not yet occurred may substantially lessen competition at some point in the future? At a very high level, the analysis includes the following steps: 1. Geographic Market. This analysis focuses on patients’ willingness to travel for particular services, as well as the degree to which health plans need certain physicians in a geography to market a successful plan to employers. Generally, geographic markets for primary care doctors may be narrower than the market for specialists who perform elective procedures, since patients may be willing to travel for elective procedures, while many patients prefer local access to a primary care service. Geographic market definition can be outcome-determinative in many antitrust cases, since it determines how many other physicians are included in the denominator when it comes to calculating market shares. 2. Market Share. Transactions that result in market shares of less than 30% have been held not to present competition concerns. On the other hand, very high market shares can be sufficient for a plaintiff to make out a prima facie case that the transaction will probably lead to anticompetitive effects. 3. Other Evidence. While courts recognize that market concentration statistics are of great consequence,

they are not conclusive indicators of anticompetitive effects. Other evidence might include documents from the parties about the motivations for the transaction and testimony from payers about any changes in bargaining leverage that might be attributable to the transaction, or evidence that the transaction will yield efficiencies that will enhance the merged firm’s ability and incentive to compete. Professional Services Agreements: “Employment Light”

The professional services agreement (PSA) has become a very popular model for physician practices that wish to affiliate with a hospital, yet retain some degree independence. In the typical PSA, a hospital will

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St. David’s Healthcare Facilities Recognized by Healthgrades For Excellence in Women’s Care Austin Hospitals Recognized Among Top 5% In the Nation for Labor and Delivery, as well as Obstetrics and Gynecology

St. David’s HealthCare announced today that all of its Austin hospitals received a Healthgrades 2020 Women’s Care Award. St. David’s Medical Center (including St. David’s Georgetown Hospital), St. David’s North Austin Medical Center (including St. David’s Women’s Center of Texas) and St. David’s South Austin Medical Center are among the top 5% of eligible hospitals in the nation to receive a Healthgrades 2020 Labor and Delivery Excellence Award™ and Healthgrades 2020 Obstetrics and Gynecology Excellence Award™. Healthgrades—the leading resource that connects consumers, physicians and health systems—evaluated clinical outcomes for women treated at each facility during labor and delivery, as well as gynecologic procedures, from 2016 through 2018. St. David’s North Austin Medical Center and St. David’s Medical Center also received a Healthgrades 2020 Gynecologic Surgery Excellence Award™, making St. David’s North Austin Medical Center among the top 5% of eligible hospitals in the nation

Arrhythmia Institute (TCAI) at St. David’s Medical Center are among the first in the world to participate in a clinical trial to evaluate a new intra-cardiac echocardiography catheter. Andrea Natale, M.D., F.H.R.S., F.A.C.C., F.E.S.C., cardiac electrophysiologist and executive medical director of TCAI, and Amin Al-Ahmad, M.D., cardiac electrophysiologist at TCAI, recently participated in the first-in-human and St. David’s Medical Center among the top 10% in the nation to receive the award. This distinction recognizes these facilities for outstanding performance in gynecologic surgery, including hysterectomy and other surgeries related to the female reproductive system. “This recognition underscores our unwavering commitment to providing the highest quality care for women at every stage of their lives,” David Huffstutler, president and chief executive officer of St. David’s HealthCare, said. “We understand that childbirth is one of the most important moments in a mother’s life, and we continue to ensure a family-focused approach to maternal care in a safe environment during the COVID-19 pandemic.” Healthgrades 2020 Labor and Delivery Excellence Award™ Hospitals that received the Healthgrades 2020 Labor and Delivery Excellence Award demonstrated exceptional care provided to mothers during childbirth. If all hospitals in the analysis trials of this catheter in Europe, in preparation for conducting in-human trials at St. David’s Medical Center in Central Texas next year. What distinguishes this catheter—the NuVision™ ICE Catheter—from previous versions is 4D imaging, which is designed to better guide complex cardiac procedures, improve outcomes and reduce procedure times, all of which are beneficial to the patient. As ablation technologies performed at the level of award recipients, complications in 124,867 patients could have potentially been avoided. In addition, Healthgrades found that patients treated in hospitals receiving the award had, on average, a 40% lower risk of experiencing a complication while in the hospital than those treated in non-recipient hospitals. Healthgrades 2020 Obstetrics and Gynecology Excellence Award™ Healthgrades 2020 Obstetrics and Gynecology Excellence Award recipient hospitals demonstrated excellent clinical outcomes while caring for women during and after childbirth, and in procedures to treat diseases and conditions affecting the female reproductive system. If all hospitals in the analysis performed at the level of award recipients, complications in 141,823 patients could have potentially been avoided. In addition, Healthgrades found that patients treated in hospitals receiving the Obstetrics and Gynecology Excellence Award had, on average, a 34% lower risk of experiencing a complication while in the hospital than those treated in non-recipient hospitals. Healthgrades 2020 Gynecologic Surgery Excellence Award™ St. David’s North Austin Medical Center and St. David’s Medical Center also out-performed peer hospitals continue to evolve, and procedures become increasingly complex, there is a growing need for advanced intracardiac imaging beyond the capabilities of 3D imaging,” Dr. Natale said. “4D imaging provides a high-resolution view of the heart structure during a complex intervention to lessen the likelihood of complications during ablation procedures. We are committed to providing leading-edge treatment to our patients, and we look forward to bringing this important advancement to St. David’s Medical Center.” This catheter offers all of the imaging capabilities of previous imaging platforms with the added spatial benefits of real-time intracardiac 3D guidance, giving physicians an advanced view of the heart in motion during complex structural heart surgeries, appendage closures and cardiac ablation procedures. This enhanced

in providing surgery on the female reproductive system. Healthgrades found that patients treated in hospitals receiving the Gynecologic Surgery Excellence Award had, on average, a 46.7% lower risk of experiencing a complication while in the hospital than those treated in non-recipient hospitals. If all hospitals in the analysis performed similarly to award recipients, complications in 10,121 patients could have potentially been avoided. “The healthcare experience in this country has changed significantly over the past few months, and the hospitals that have achieved a Healthgrades 2020 Women’s Care Award go above and beyond to provide the best care possible for women. We commend all of the organizations that have had to create new protocols, adapt and evolve to keep women and their newborn babies safe amidst Medical Officer, Healthgrades, said.

Texas Cardiac Arrhythmia Institute Physicians Participate in Clinical Trial For 4D Imaging Technology For Complex Heart Procedures

Physicians with the Texas Cardiac COVID-19,” Brad Bowman, MD, Chief visualization allows physicians to better assess complex cardiac structures with the potential to improve patient outcomes while reducing procedure times and fluoroscopy (X-ray) exposure. It also gives physicians better control of the image generation by allowing them to guide the catheter throughout the procedure. “Through the Texas Cardiac Arrhythmia Institute at St. David’s Medical Center, we are committed to advancing the level of care for patients with cardiac conditions,” Dr. Al-Ahmad said. “Having the ability to view direct images of a procedure in real time allows us to more safely and effectively treat patients.” 4D imaging also allows doctors to perform structural heart procedures under conscious sedation, which is associated with a lower risk of complications for patients.

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