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FTC acts to stop Sanford’s takeover of N.D. physician group

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The Federal Trade Commission, worried about less competition and resulting higher consumer prices, has acted to stop a large rural nonprofit healthcare system from acquiring a big North Dakota physician group.

The agency and the state attorney general have filed a complaint  in federal district court seeking a temporary restraining order and preliminary injunction to stop the deal between Sanford Health and Mid Dakota Clinic pending an administrative trial,   scheduled to begin on Nov. 28.

The takeover would create a physician group with at least 75 percent share of primary care and several other healthcare services in its market.

The FTC said the deal would violate antitrust law by significantly  cutting 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.

Sanford Health is the largest, rural, not-for-profit healthcare system in the country, with among other facilities,  45 hospitals and 289 clinics in nine states and three countries. Mid-Dakota has over 90 clinicians.

The FTC asserts that the deal that it would be the only physician group offering general surgery physician services in the affected 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.

Sanford Health and Mid Dakota Clinic currently compete to join commercial insurers’ provider networks, which Lipsky said spurs the organizations 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,” he said.

But the two healthcare organizations told The Bismarck Tribune that the FTC’s actions are “extremely frustrating” because they relied on national, legal and economic experts to evaluate the partnership.

“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,” Shelly Seifert, M.D., board chair of the Mid Dakota Clinic, told  the newspaper.

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