Consent agreement with SGHP not admission of law breaking

THOMASVILLE -- John D. Archbold Memorial Hospital was not named or found guilty in an Federal Trade Commission antitrust complaint as reported in Friday's edition of the Thomasville Times-Enterprise.

The FTC complaint was against South Georgia Health Partners, LLC, a large Georgia physician-hospital organization based in Tifton, along with its five owner PHOs and three associated physician independent practice associations.

The FTC Tuesday announced that it had settled charges that South Georgia Health Partners had illegally entered into agreements to fix hospital and physician prices.

"The information in Friday's story contained some inaccuracies, and, after thoroughly researching the complaint, we want to clarify the FTC complaint and settlement. The FTC has not ruled against the hospitals nor was Archbold named. A proposed settlement was reached to remedy the alleged illegal conduct described in the complaint. We apologize for any misunderstanding or confusion this may have caused," said publisher S. Jane Benton.

The FTC complaint charges that four PHOs organized SGHP in 1995 as a vehicle through which competing hospitals and physicians could bargain collectively with health plans to gain higher fees for themselves.

SGHP's membership consists of 15 hospitals -- with 2,247 staffed beds -- and approximately 500 physicians. SGHP is owned by five hospital organizations in Moultrie, Thomasville, Tifton, Valdosta and Waycross. The Thomasville organization is called Health Alliance of the South. Its principle address is John D. Archbold Memorial Hospital, 915 Gordon Ave.

"These physician and hospital organizations engaged in anti-consumer practices that violate fundamental antitrust principles," Bureau of Competition director Susan Creighton said in statement on the FTC Web site. "The FTC's proposed order in this case is an effective and appropriate law enforcement response to the allegedly anti-competitive behavior."

The proposed settlement, according to the FTC, constitutes no finding of or admission of a law violation on behalf of South Georgia Health Partners or any of its related managed-care organizations.

SGHP President and CEO Frank Riley said the FTC action to force the hospital organizations to discontinue their association is unwarranted, adding SGHP was forced to settle the dispute for financial reasons.

"We could defend the size, structure and practices of SGHP, but it would require years of litigation with the federal government," Riley said. "While the FTC is virtually unlimited in the amount of manpower and resources they can bring to such a fight, SGHP has very little, in comparison. The costs of legal defense were such that the company could not survive."

Archbold Medical Center President Ken B. Beverly dubbed the FTC allegations against SGHP "totally false."

"The idea was to provide a seamless managed-care network that could be a benefit to employers with multiple locations within the region," Beverly said. "As a regional managed-care organization, SGHP offered discounted costs to self-insured employers and insurance companies, saving employers money on their employee health benefit plans."

Pointing to the Low Cost 100 Report, an independent ranking of the nation's hospitals with the lowest prices, Beverly insisted SGHP costs were among the lowest in the country.

"No one got overcharged," he said. "In fact, the exact opposite is true. Archbold patients and SGHP clients received discounted charges for health-care services provided."

The FTC-SGHP proposed consent agreement will be subject to public comment until Oct. 9, after which the commission will decide whether to make it final. Comments should be made to the FTC, Office of the Secretary, 600 Pennsylvania Ave. N.W., Washington, D.C. 20580.

"We followed the 1996 Statements of Antitrust Enforcement Policy in Health Care jointly issued by the FTC and U.S. Department of Justice and are now being penalized for it," Riley said. "However, the FTC's complaint has some pretty harsh language in it."

Copies of the complaint, agreement proposal and an analysis to aid in public comment are available on the Web at If the agreement is approved, SGHP will cease to exist, meaning its customers will have to search for other options.

"If the FTC is going to start attacking physician-hospital organizations across the country, then it needs to revise the guidelines to provide better clarification to health-care providers before changing the rules," Riley said. "The FTC is doing a disservice to regional companies that relied on SGHP to pool resources, centralize medical management, standardize services and provide access to a broad spectrum of health-care services."

According to the complaint, SHGP's strategy harmed consumers in a region encompassing more than 550,000 people, by causing physician and hospital prices to rise and denying consumers the benefits of unrestrained competition among providers of health care. Through the settlement order, the SGHP, the owner PHOs and the IPAs will be barred from engaging in similar allegedly anti-competitive conduct in the future.

SGHP includes Coastal Plains Health Alliance LLC; Colquitt County PHO, LLC; Colquitt County Physicians Association LLC; Georgia/Florida Preferred LLC, doing business as Health Alliance of the South; Qualicare Physicians Association LLC; Satilla Healthnet Inc.; South Georgia PHO, LLC; and South Georgia Physician Network LLC.

In addition to Archbold, the Health Alliance of the South's hospital members include four hospitals leased and managed by Archbold -- Brooks County Hospital in Quitman, Early Memorial Hospital in Blakely, Grady General Hospital in Cairo and Mitchell County Hospital in Camilla. In addition, approximately 90 percent of all physicians in Thomas County and a high percentage of physicians in the other counties served by Archbold are Health Alliance of the South members.

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