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Providence Narrowly Avoids Antitrust Scrutiny for Now. Local Imaging Centers Will Press On.

March 22, 2006. Portland, OR.--In a carefully worded opinion, Federal District Court Judge, Garr M. King, narrowly granted a motion filed by Providence Health System to dismiss a pending antitrust lawsuit brought by EPIC Imaging and Body Imaging Radiology, two local diagnostic imaging facilities. "We are obviously disappointed with the decision but also encouraged by its narrow scope," said Michael Haglund, attorney for the imaging centers. "Judge King found sufficient evidence of anti-competitive behavior and intent to monopolize for the case to go to a jury. His dismissal was based solely on a finding that we had not provided sufficient evidence that Providence was close to achieving a monopoly." This certainly leaves the door wide open for future action.

The suit, originally filed in April, 2005, presented evidence that Providence Health System is engaged in predatory behavior designed to stifle competition in the field of diagnostic imaging and secure and maintain a monopoly. The negative consequences could be severe for a large number of Oregonians. The quality of patient care will be undermined, physician access to the diagnostic tools of their choice will be limited, the pace of life-saving innovation will be slowed and the cost of diagnostic imaging services will rise. "Providence is blatantly putting their own profits ahead of the best interest of physicians and patients," said Dr. Gerald Warnock, Medical Director of EPIC Imaging. "We are deeply disappointed we will not be allowed to present our case to a jury at this time."

The imaging centers will now be keeping a very watchful eye on the healthcare giant, confident they can obtain the evidence required to re-file the lawsuit. They are also considering an appeal. "The gulf between what is morally and ethically right and what can be proven in a court of law is difficult to accept," said Dr. Warnock, "but as long as Providence continues on its present path, it is really just a matter of time."

In a hearing held on February 13, Providence freely acknowledged it is common practice for it to terminate qualified physicians from the preferred provider panels it controls as a way to keep referrals in the system. Since Providence currently rents its provider panels to over 100 independent (non-Providence) insurance companies including such large players as Aetna and Cigna, the practice which Providence terms "selective contracting" denies physicians the opportunity to compete on the basis of service and price for upwards of 40% of market. "It is a sad day in medicine when we stop credentialing physicians on the basis of professional competence and shift to whatever standard makes more money for the system," said Dr. Paul Meunier, Medical Director of Body Imaging Radiology.

The Antitrust lawsuit was filed on April 4, 2005 after Providence Health System informed EPIC Imaging and Body Imaging Radiology that their long-standing contracts as preferred providers of imaging services would be terminated without cause. In a mass mailing to Portland area physicians, Providence acknowledged that the centers had "provided excellent patient care over the years" but they had determined it was in the "best interest" of their customers to consolidate imaging in their own facilities.

Many customers and area physicians disagreed and wrote letters urging Providence to reconsider. The letter writers included such notable groups as Pacific IPA, Inc., an independent physicians association which represents 82 primary care physicians and 20 specialty physicians from Northwest Primary Care Group, Oregon Primary Care Physicians as well as The Oregon Clinic and The Portland Clinic. All cited the excellent service the centers had provided over the years but Providence was unmoved by the appeals.

Providence Antitrust Action page