A year after the completion of antitrust lawsuit that forced it to unwind its planned merger with St. Luke’s Health System, Saltzer Medical Group is planning for its future as an independent organization.
The Nampa-based company says it is now the largest independent multispecialty physicians group in Idaho, with 40 doctors. It plans to increase that to 100 in the next five to ten years, including adding surgical subspecialists. The organization, now with six locations, is focusing on expansion in Canyon and Western Ada counties, and could add a third Quick Care clinic in Meridian.
“That’s where the growth is,” said John Kaiser, president of the company, of Canyon County and west. Saltzer has clinics between Boise and Caldwell. “It’s helpful to be in a growing community.”
After the lawsuit (see box), it took Saltzer a year and a half to unwind it. In May 2017, the company entered into a long-term managed services agreement with Change Healthcare, based in Nashville, Tennessee. Change Healthcare assumed responsibility for all of Saltzer’s non-clinical operations, such as clinical and administrative staff management, finance, accounting, real estate, human resources, and technology hosting and support.
Once that was accomplished, it was time to look at the doctors, some of whom the organization had lost during the transition. By the time the lawsuit was over, it was down to 30 doctors. “We decided to look at how we might add specialists and primary care doctors to our group,” Kaiser said. “We started reaching out to doctors in the community as an alternative from the two major hospital systems.”
Since then, Saltzer has added three specialty areas – ear, nose, and throat, general surgery, and a partnership with a dermatologist – and is looking to expand its subspecialties beyond that, Kaiser said.
The organization is also working to expand its Quick Care facilities – drop-ins for non-emergency but unscheduled care, similar to the urgent care centers run by its two large competitors in the Boise-area market, the St. Luke’s and Saint Alphonsus health systems. Saltzer has two Quick Care locations in Nampa, one at the original Saltzer location near 12th Ave. and one next to the St. Luke’s facility near Nampa Costco. The company is also considering opening another one in Meridian by the I-84 interchange on Eagle Road.
Unlike quick care providers such as Primary Health Medical Group, Saltzer sees its quick care locations primarily as an adjunct for its own patients, because the facilities have their medical records and can get the patients back with their primary care doctors faster than through an emergency room visit, Kaiser said. “There’s a significant cost savings to patients and to payers,” he said.
While St. Luke’s and Saint Alphonsus occupy a major role in Idaho healthcare, there is still room for providers such as Saltzer and Primary Health Medical Group, based in Garden City, the smaller providers say. The demand for fast, efficient care is increasing, said David Peterman, CEO of Primary Health, which said it had nearly 400,000 patient visits last year.
“We have two clinics opening in 2019,” Peterman said. “We will continue to expand to make sure the community has accessible primary care services.”
Clinics such as Saltzer and Primary Health, which are not aligned with a hospital system, are more flexible in responding to changes, Kaiser said. For the doctors, the smaller organization means they have more say in how the group is run and how they run their practice in a private group setting, he said. At the same time, being aligned with an organization such as Saltzer lets doctors take advantage of the administrative support Change Healthcare provides. “Because of what we set up with Change Healthcare, we can provide economies of scale by billing and collections expertise that you’re probably not going to be able to get on your own as a private doctor,” he said.
Background on the Saltzer-St. Luke’s lawsuit
Founded in 1961, Saltzer started looking in 2009 at its plans for the future, said John Kaiser, president of the company. “It was a general move throughout the county, aligning with hospital systems,” he said. “We decided to figure what might work for us.”
The company, based in Nampa, decided to align with St. Luke’s Health System. But that led to an antitrust lawsuit by Saint Alphonsus Regional Medical Center, Treasure Valley Hospital, the Federal Trade Commission (FTC), and Idaho Attorney General Lawrence Wasden in 2012, seeking to halt the acquisition.
U.S. District Judge B. Lynn Winmill ruled in January 2014 that the buyout needed to be unwound because it was likely the deal would raise health care costs by giving the hospital a dominant market position. Saltzer and St. Luke’s then appealed the decision to the Ninth Circuit Court, which upheld the lower court ruling in February 2015.
In June 2015, Wasden’s office and the FTC filed a motion claiming St. Luke’s was divesting only a fraction of Saltzer and not completely complying with Winmill’s judgment. In July 2015, Winmill ordered St. Luke’s to disclose its separation plan from Saltzer.