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“We are pleased that the U.S. Supreme Court has agreed with lower courts and has declined to review this case, finally bringing this matter to a close,” said Mary Boosalis, president and CEO, Premier Health. “Premier Health and its hospitals act in accordance with the law, including anti-trust laws. Our handling of our interactions with the Medical Center at Elizabeth Place was no different and was consistent with our values, which are the foundation of the service we provide to the community.”
Elizabeth Place was seeking to appeal a decision in April, when the majority of a panel of Sixth Circuit judges in April decided in favor of the Premier hospitals, which are Miami Valley Hospital, Atrium Medical Center, Upper Valley Medical Center and Good Samaritan (which has since closed).
The judges in April didn’t make a substantial ruling on whether the Premier hospitals violated the Sherman Anti-Trust Act. Rather, the judges said that Elizabeth Place gambled by betting their entire case on being able to establish that the Premier hospitals acted in a way that was so obviously anti-competitive that it had no plausible pro-competitive features.
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The judges, however, said there could be plausibly good business reasons for all of the conduct Premier hospitals’ were accused of.
In one example, Elizabeth Place said Premier hospitals told insurance companies that if the insurers added Elizabeth Place as in-network, then Premier hospitals would be able to renegotiate the discounts they gave that insurer.
The judges found there’s precedent to support an exclusive arrangement because an insurance company may get better rates from a hospital in exchange for agreeing to an exclusive contract, since exclusivity will drive a higher volume of business to the hospital.
That opinion stated “the record leaves no doubt that Hospital Defendants felt threatened by the possibility of MCEP’s (Medical Center at Elizabeth Place’s) presence in the Dayton medical market.”
The judges wrote that as Elizabeth Place prepared to open, a letter written by primary care physicians — most of whom were affiliated with Premier hospitals — told other physicians in the Dayton area that “A physician owned specialty hospital will take the better-insured and more profitable patients away from Premier (along with ancillary services), leaving our local hospitals with only the more complex and underinsured patients.”
Elizabeth Place doctors responded with their own letter to their colleagues saying they would not turn away patients based on what kind of coverage they had and that the hospital would have less revenue than Premier and pay corporate, personal and property taxes since Elizabeth Place isn’t a nonprofit.
Dr. John Fleishman, with Elizabeth Place, said the doctors who came together 14 years ago to resurrect the former St. Elizabeth Medical Center were disappointed in the outcome in the case. However, he said they are also happy that the litigation is over, because the past seven years were very stressful for all of their physicians.
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“When I came to Dayton 30 years ago, there were eight hospitals in greater Dayton. These hospitals competed for patients based on quality and price. Today there are only two healthcare ‘systems’ in Dayton and the price of healthcare continues to rise,” he said in a statement. “Our antitrust litigation attempted to address this problem. Healthcare costs have become inelastic to market forces nationwide. One can argue that in many American cities there is no longer a ‘free’ market in healthcare.”
The physician-owned hospital sold a share of the business in 2009 to a subsidiary of Kettering Health Network — Premier’s competitor — so that the hospital could get access to insurance contracts through Kettering. Kettering Health said Friday that its subsidiary owns a 50 percent interest in Elizabeth Place.
“We look forward to strengthening our relationship with Kettering as we go forward,” Fleishman said.
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