The recent federal antitrust case of Federal Trade Commission and State of Idaho, Plaintiffs, v. St. Luke’s Health System, Ltd, and Saltzer Medical Group, P.A. highlights an important legal consideration for hospitals looking to acquire medical practices and physicians looking to sell to them. Notwithstanding arguments of cost savings and increased quality and convenience through vertical integration, where such an acquisition would concentrate too much market power in a hospital or health system, the arrangement could run afoul of federal and state antitrust laws. Such was the case with St. Luke’s acquisition of Saltzer Medical Group in Idaho. In the Saltzer case, a federal Court recently found that the acquisition resulted in St. Luke’s having a dominant position in its market (with 80% of the primary care physicians under the St. Luke’s banner) which was likely to increase health care costs. In the Court’s opinion, health care prices were likely to increase as a result of St. Luke’s increased ability to (1) negotiate higher reimbursement rates from health insurance plans that would likely be passed on to the consumer, and (2) raise rates for ancillary services (like x-rays) to higher hospital-billing rates (as opposed to lower in-office rates). As a result, the Court found that the acquisition violated § 7 of the federal Clayton Act and the Idaho Competition Act, and required St. Luke’s to divest itself of the medical group.