A Bloomington, Indiana, surgeon has been cleared to resume his antitrust lawsuit against Indiana University Health, the hospital and health care network he asserts has illegally monopolized many health care services in his home city, revoking his hospital privileges when he resisted their attempt to coerce him into abandoning his independent practice.
On July 8, a three-judge panel of the U.S. Seventh Circuit Court of Appeals in Chicago ruled in favor of physician Ricardo Vasquez, saying an Indianapolis federal judge had improperly dismissed his case.
The decision was rendered by Seventh Circuit Judge Diane P. Wood. Judges David Hamilton and Candace Jackson-Akiwumi concurred.
The Seventh Circuit hears appeals in cases filed in federal courts in Illinois, Indiana and Wisconsin.
Vasquez “alleges not only that a hypothetical monopolist could dominate the Bloomington market … but also that IU Health already does so,” said Judge Wood, and his claims “easily clear the plausibility bar.”
The lawsuit centers on a dispute between Vasquez and IU Health that dates back to 2017.
Seven years earlier, according to court documents, IU Health first entered the market in Bloomington, Indiana, when its former iteration of Clarian Health Partners purchased Bloomington Hospital.
In 2017, the rebranded IU Health purchased Premier Healthcare, a physician group in Bloomington. According to court documents, that acquisition meant IU Health then employed 97% of primary care providers in Bloomington and more than 80% of PCPs in the Bloomington region.
After the Premier acquisition, Vasquez said his conflict with IU Health began.
Vasquez, a vascular surgeon, allegedly resisted IU Health’s efforts to force him to abandon his independence. Vasquez asserts IU Health then allegedly launched a “’systematic and targeted scheme’ to ruin his reputation and practice.”
The conflict culminated in IU Health’s decision in 2019 to revoke Vasquez’s privileges at Bloomington Hospital.
Vasquez filed suit in 2021, accusing IU Health of violating federal antitrust law by exercising monopoly powers over the Bloomington health care market.
In the lawsuit, Vasquez asserted IU Health had used its newly acquired monopoly over primary care physicians to block out specialists, like vascular surgeons, who rely on referrals to obtain patients, forcing patients to choose between keeping their doctor and traveling hours to obtain care, or staying close to home.
When the case landed in court, U.S. District Judge Jane Magnus-Stinson dismissed Vasquez’s case. The decision rested in large part on what Magnus-Stinson found to be a contradiction in Vasquez’s arguments.
The judge noted Vasquez’s contention that people who live in Bloomington are left only with the choice to use IU Health’s services, or drive two hours to Indianapolis to find the same level of care. Meanwhile, the doctor asserted, many patients living in the rural areas around Bloomington regularly travel up to two hours for health care in Bloomington.
Judge Magnus-Stinson said this “inconsistency” made Vasquez’s claims concerning the Bloomington market less than plausible.
On appeal, however, Judge Wood and her colleagues said Vasquez’s claims were easily plausible.
They noted a monopolist health care organization that controls the hospitals, operating rooms, and the primary care doctors who refer patients to the surgeons could easily be “well-positioned to engage in anticompetitive practices” and “capture the entire market.”
They also rejected the notion of a contradiction in Vasquez’s claims concerning the willingness of Bloomington residents to travel, compared to that of those living in the surrounding countryside.
“They concern two different groups of people – urban and rural patients – with different expectations, motivations, and market behaviors,” Judge Wood wrote.
Further, the judges said, patient travel patterns are not the “linchpin” of Vasquez’s case. Rather, such “patient flow” is “just one piece of data in the broader picture” painted by Vasquez, and “are not likely to be dispositive.”
“The geographic market for an antitrust claim need not — and very often will not —correspond to the comprehensive market that the alleged monopolist serves,” Wood wrote.
Wood stressed the appellate panel was not ruling on the merits of Vasquez’s claims. Rather, they said Judge Magnus-Stinson erred in not allowing Vasquez to move his case forward.
They reversed Magnus-Stinson’s decision, and sent the case back to district court for further proceedings.
Vasquez is represented in the case by attorneys Katharine M. O’Connor and Sarah P. Hogarth, of the firm of McDermott Will & Emery, of Chicago and Washington, D.C.
IU Health is represented by attorneys Brian K. Grube and Arthur T. O’Reilly, of Jones Day, of Cleveland, Ohio, and Detroit, Michigan.