The merger of Sanford Health and Mid Dakota Health is being taken to court.

The Federal Trade Commission and the North Dakota attorney general’s office are claiming it would reduce competitiveness, and are seeking a temporary restraining order and preliminary injunction to stop the deal, pending an administrative trial in federal court, slated to start Nov. 28.

“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,” Tad Lipsky, acting director of the FTC’s Bureau of Competition, said in an FTC statement.
“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,” Lipsky went on. “The transaction would eliminate that competitive pressure.”

The deal would result in a physician group in control of “75 to 85 percent share in the provision of adult primary care physician services, pediatric services, and obstetrics and gynecology services,” according to the commission.

In addition it would be “the only physician group offering general surgery physician services in the affected area,” according to the complaint.

Sanford and Mid Dakota Clinic countered the claim, calling the move “extremely frustrating,” according to U.S. News & World Report.

“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,” Dr. Shelly Sheifer, Mid Dakota’s board chairperson, told Bloomberg BNA News, adding that, “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.”

Executive vice president of Sanford Bismark, Dr. Craig Lambrecht, also was surprised by the government move.

“We intend to vehemently defend our efforts to enhance medical care in central and western North Dakota,” he told the news service. “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.”

The pair are now close rivals for talent and customers, according to the FTC.

“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,” Lipsky advised.

The transaction would create a group of physicians with at least a 75 percent to 85 percent share of physician services in adult primary care, pediatric services, as well as obstetrics and gynecology.

Sanford Bismarck employs 160 physicians and 100 mid-level practitioners. Sanford Medical Center Bismarck has 217 hospital beds. Mid Dakota Clinic employs 61 physicians and 19 advanced practice practitioners and operates six clinics in Bismarck, as well as a Center for Women and an ambulatory surgery center.

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