Bellingham medical group agrees to end decades-long monopoly in Whatcom, Skagit counties
A Bellingham medical group agreed to end a decades-long monopoly it held in Whatcom and Skagit counties and pay $110,000 in costs and fees.
Washington State Attorney General Bob Ferguson announced Thursday, Aug. 26, that he was filing an antitrust consent degree in Whatcom County Superior Court that will require Bellingham Anesthesia Associates to stop illegally requiring physicians to sign three-year non-compete contracts. The agreement, if approved, resolves a lawsuit filed by Ferguson’s office.
The non-compete contracts along with other exclusive contracts with area hospitals and medical centers, Ferguson alleged, allowed Bellingham Anesthesia Associates to corner approximately 90 percent of the physician-administers anesthesia services in Whatcom and Skagit counties and were a violation of the Washington Consumer Protection Act.
“Bellingham Anesthesia Associates’ illegal actions decreased competition and prevented lower-cost options,” Ferguson said in a release on the decree. “The firm did this at the expense of patients. Today’s agreement holds it accountable and ensures Whatcom and Skagit counties will have better options for local medical needs.”
Bellingham Anesthesia Associates is a group of 48 physician anesthesiologists, according to its website, and provides care in Whatcom, Skagit, Snohomish and San Juan counties.
But the group used exclusive contracts with hospitals and medical clinics in the area for at least the past two decades, making it, in effect, the only anesthesia provider in Whatcom and Skagit counties, according to the release.
Bellingham Anesthesia Associates is the exclusive provider for St. Joseph hospital in Bellingham, as well as a multi-specialty ambulatory surgical center and a single-specialty surgical center in Bellingham. Pacific Rim Outpatient Surgery Center in Bellingham does not have an exclusive agreement, but more than 90 percent of its surgeries default to physicians at Bellingham Anesthesia Associates.
It became the only option in the area, Ferguson alleged, by forcing doctors to sign broad non-compete agreements, barring physicians who were shareholders from practicing anesthesia for non-dental medical procedures in the area for three years if they were not representing Bellingham Anesthesia Associates.
Bellingham Anesthesia Associates employees were prevented from leaving and starting their own business, the release states, and anesthesia providers from outside the area did not have a financially viable path to open a competing practice.
“During the three decades BAA has operated with these exclusive contracts in Bellingham, its conduct made it the dominant provider of anesthesiologists in the area,” the release stated. “Local patients and medical providers had no choice other than a doctor from BAA. BAA’s monopoly limited the choices medical facilities and surgeons could make and also limited the options available for local patients. By controlling the local health care market, BAA did not have to compete to provide enhanced services, offer more options or reduce its prices.”
The decree filed by Ferguson Wednesday still must be approved in Whatcom County Superior Court.
Once a judge signs it, the decree will limit Bellingham Anesthesia Associates’ current and future employee non-compete time to nine months or a year for shareholders, according to the release.
The group also will be allowed to keep exclusive contracts with area hospitals that need anesthesiologists on standby, but it must cancel contracts with outpatient surgical centers, medical clinics and other providers who do not need standby coverage.
Bellingham Anesthesia Associates also must pay $110,00 to the state Attorney General’s office to cover the costs of the investigation and to fund future consumer protection actions.
