Saint Alphonsus Medical Center - Nampa et al v St Luke's Health System Ltd

Filing 338

MEMORANDUM DECISION AND ORDER. In accordance with the Memorandum Decision above, NOW THEREFORE IT IS HEREBY ORDERED, that the motion to exclude the testimony of Dr. Enthoven 158 is DENIED. Signed by Judge B. Lynn Winmill. (caused to be mailed to non Registered Participants at the addresses listed on the Notice of Electronic Filing (NEF) by (st)

UNITED STATES DISTRICT COURT
IN THE DISTRICT OF IDAHO
SAINT ALPHONSUS MEDICAL CENTER NAMPA, INC., TREASURE VALLEY
HOSPITAL LIMITED PARTNERSHIP,
Case No. 1:12-CV-00560-BLW (Lead
SAINT ALPHONSUS HEALTH SYSTEM,
Case)
INC., AND SAINT ALPHONSUS
REGIONAL MEDICAL CENTER, INC.
MEMORANDUM DECISION AND
ORDER
Plaintiffs,
v.
ST. LUKE’S HEALTH SYSTEM, LTD.
Defendant.
FEDERAL TRADE COMMISSION; STATE
OF IDAHO

Case No. 1:13-CV-00116-BLW

Plaintiffs,
v.
ST. LUKE’S HEALTH SYSTEM, LTD.;
SALTZER MEDICAL GROUP, P.A.
Defendants.

INTRODUCTION
The Court has before it a motion to exclude certain testimony from Dr. Alain
Enthoven, St. Luke’s expert witness. The motion was fully briefed and argued before the
Court. For the reasons expressed below, the Court will deny the motion.
LEGAL STANDARD

Memorandum Decision & Order – page 1

Under Federal Rule of Evidence 702, this Court may exercise discretion to allow
expert testimony if the testimony (1) “will help the trier of fact to understand the
evidence or to determine a fact in issue;” (2) “is based on sufficient facts or data;” (3) “is
the product of reliable principles and methods;” and (4) the expert “has reliably applied
the principles and methods to the facts of the case.” Rule 702 requires this Court to
determine that the expert testimony “both rests on a reliable foundation and is relevant to
the task at hand.” Primiano v. Cook, 598 F.3d 558, 564 (9th Cir.2010) (quoting Daubert
v. Merrell Dow Pharm., 509 U.S. 579, 597 (1993)). “Expert opinion testimony is
relevant if the knowledge underlying it has a valid connection to the pertinent inquiry.
And it is reliable if the knowledge underlying it has a reliable basis in the knowledge and
experience of the relevant discipline.” Id. at 565.
Because this is a bench trial “there [is] little danger under the circumstances that
the court [will be] . . . unduly impressed by the expert’s testimony or opinion,” and the
Court can give “it the weight [the Court feels] it deserved.” Shore v Mohave County,
State of Ariz., 644 F.2d 1320, 1322-23 (9th Cir. 1981).
ANALYSIS
Plaintiffs seek to exclude any testimony from Dr. Enthoven on the quality-related
benefits of the Saltzer deal. Plaintiffs point to his deposition testimony where he
conceded that he had not read any of St Luke’s PSAs. From this, plaintiffs conclude that
he “has no knowledge concerning the types of contractual arrangements St Luke’s has
with its acquired physician groups,” and thus has “no way of knowing whether the
acquisition creates the requisite integration to achieve the purportedly greatest benefits of
Memorandum Decision & Order – page 2

integrated patient care.” See Plaintiffs’ Brief (Dkt. No. 160) at pg. 9 (emphasis in
original).
It is true that when asked if he had “read any St Luke’s PSA,” he answered “No.”
See Dr. Enthoven Deposition (Dkt. No. 179-4) at p. 139. At another section of his
deposition, he states that he “didn’t have time” to read any of St. Luke’s quality based
compensation measures. Id. at pp. 158-159. However, Dr. Enthoven did interview six
top executives from St. Luke’s and Salzter. He also reviewed thirty depositions.
Plaintiffs do not point to any testimony where Dr. Enthoven inaccurately
characterized a provision of a St. Luke’s PSA. In his deposition testimony, Dr. Enthoven
demonstrated a general familiarity with St. Luke’s strategy of changing its compensation
model from one focusing on volume to one focusing on quality. Id. at p. 68. He testified
extensively on the quality-enhancing benefits of moving away from the fee-for-service
model of compensation and toward the quality-based model of compensation. It
therefore appears that he learned something about St. Luke’s compensation strategy from
his six interviews and his review of the thirty depositions. The Court therefore refuses to
exclude his testimony because he did not read the PSAs.
Plaintiffs also argue that Dr. Enthoven is unqualified to “provide opinions relating
to health information technology, such as electronic medical record systems (“EMR”)
and data analytic tools.” See Plaintiffs’ Brief (Dkt. No. 160) at p. 4. Plaintiffs point out
that Dr. Enthoven admitted during his deposition testimony that “I’m not a healthcare IT
expert.” See Dr. Enthoven Deposition (Dkt. No. 179-4) at p. 143. Plaintiffs argue that

Memorandum Decision & Order – page 3

because Dr. Enthoven demonstrated no familiarity with these tools, his testimony on
them should be excluded.
The Court disagrees. Dr.Enthoven has written extensively on how feedback loops,
enabled by technology, are crucial to promote integrated care. More specifically, he
studied the Whitecloud tool and interviewed executives with St. Luke’s and Saltzer on
their EMR systems. He will not testify about the technical aspects of these tools, but
rather will explain how their use promotes high quality care. In other words, he will
testify about function, not mechnics; he will testify as an economist, not a programmer.
On that basis, his opinions appear to satisfy the relevance and reliability requirements.
Finally, plaintiffs seek to exclude his testimony on the competitive effects of the
Saltzer deal. They point out that he has admitted that he is not an expert in “antitrust
economics.” Id. at p. 197.
Plaintiffs do not, however, identify any specific testimony where Dr. Enthoven
opines on antitrust law or the legal implications of the facts in this case. He will testify
that “it is incorrect to conclude simplistically that any increase in St. Luke’s size would
be anti-competitive.” See Report (Dkt. No. 160-2) at p. 127. The Court interprets this as
a statement of economics, not a statement of law. As such, it is well within the expertise
of an economist who studies these matters. Dr. Enthoven has written extensively on the
effects of competition in the health care market, and is a prominent authority in this field.
Economists have insights to offer on competition that do not depend on having any
expertise in antitrust law. If Dr. Enthoven strays from offering the insights of an

Memorandum Decision & Order – page 4

economist – and testifies about antitrust law – his testimony may be stricken. But no
such testimony has been identified yet, and so there is nothing to strike.
ORDER
In accordance with the Memorandum Decision above,
NOW THEREFORE IT IS HEREBY ORDERED, that the motion to exclude the
testimony of Dr. Enthoven (docket no. 158) is DENIED.

DATED: October 15, 2013

_________________________
B. Lynn Winmill
Chief Judge
United States District Court

Memorandum Decision & Order – page 5