• AG Ferguson sues CHI Franciscan for 'price-fixing monopoly'

    By: Amy Clancy


    Washington State’s top lawyer believes medical care across Kitsap County is costing patients more – while putting their health at risk.

    Attorney General Bob Ferguson filed a lawsuit Thursday accusing CHI Franciscan Health of “price fixing” and creating a dangerous monopoly.

    >> See the complaint here

    The Doctors Clinic and Westsound Orthopaedics’ many Kitsap County locations were acquired by CHI Franciscan Health last year. 

    Ferguson told KIRO 7 in a sit-down interview that the complaints started coming into his office soon after.

    “They removed competitors, essentially, and raised prices,” Ferguson said from his Seattle office.  “Once you remove your competitors and raise prices, there’s no benefit to the consumers.  All they have is longer waiting times, more difficulty getting to their appointments and higher prices.  That’s not right, and it’s against the law. 

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    The lawsuit claims the deals violate state anti-trust laws, resulting in “price-fixing” and eliminating competition.

    Republican legislator Michelle Caldier represents Port Orchard.  She told KIRO 7 she heard complaints from doctors who felt they had no option but to cave-in to CHI’s Franciscan’s demands or go out of business.  She said patients told her they were forced to have even the most simple surgeries at the hospital under this new merger.

    “It is far more expensive to have that same procedure done in a hospital setting compared to an ambulatory surgical center,” Caldier said.  “They felt they were being overcharged.”

    Ferguson said his lawyers uncovered private communication between CHI Franciscan and The Doctors Clinic’s former physician president that admitted the deal would enhance profits but be harmful to patient care, writing:

    “I can’t wait to hear how CHI messages the addition of TDC to (Franciscan Medical Group). ‘You can now get your outpatient care at a complex, relatively unsafe and vastly more expensive location.  You are welcome, Kitsap County.’”

    “I feel good my team uncovered these documents,” Ferguson said.  “The public is now aware of them, and becomes aware of why we bring a case like this, and why it’s so important.”

    A spokeswoman for CHI Franciscan declined KIRO 7’s request for an on-camera interview but released the following statements:

    Statement from CHI Franciscan Health

    "We are disappointed that the Attorney General took this extreme action against physicians and caregivers on the Peninsula. The Doctors Clinic and Westsound Orthopaedics came to us separately, and each group asked us to consider an affiliation with them, because both groups were in financial distress and needed CHI Franciscan’s assistance to be able to continue to serve patients in the Kitsap community. We are very concerned that the AG’s actions will drive away physicians from the community, inhibit our ability to recruit new physicians to the area, and will ultimately result in fewer choices and less quality health care available to the residents of the community. Because of our concern about what a lawsuit of this nature might do to health care in the community, TDC, WSO, and CHI Franciscan attempted to negotiate in good faith with the AG to try to respond to his concerns without the need for him to file a lawsuit and cause disruption in the local health care community. The AG rejected our attempts to negotiate, and instead chose to act in a way that will cause instability in the Kitsap health care market for some time to come. CHI Franciscan plans to vigorously defend this case, and believes that the AG’s allegations are misguided and unfounded.” – Cary Evans, Vice President, Communications & Government Affairs, CHI Franciscan Health

    Statement from The Doctors Clinic

    "Like many small clinics across the country, our doctors just want to care for their patients. Yet we face enormous pressures in today's healthcare environment. Insurance reimbursement rates are way down and patient volumes can be unpredictable. In the face of these financial pressures, we approached CHI Franciscan about a partnership that keeps our clinics open and ensures our doctors can continue to live and practice on the peninsula." – Jay Burghart, Executive Director, The Doctors Clinic

    Statement from Westsound Orthopaedics

    "As Orthopedic specialists, our primary goal is to provide high quality, accessible patient care. Our viability hinges on the patients we serve, as well as our relationship with the broader medical community and insurance providers. In the current healthcare economy, small practices like ours are increasingly squeezed and unsustainable. To remain open and keep expert specialist doctors on the Peninsula, we joined CHI FH so we could continue to provide world-class care to our patients." – Dawson S Brown, MD 


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