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US: Hospitals win in dispute to protect confidential data in FTC suit

By  |  March 1, 2016

Chicago-area hospitals are keeping a close eye on the Federal Trade Commission’s attempt to block Advocate Health Care’s merger with NorthShore University HealthSystem — so close that they don’t want confidential information they turned over to the government to fall into the wrong hands.

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    The desire of some of the biggest players in Chicago health care, including Northwestern Memorial, University of Chicago, Rush University Medical Center, Presence Health and Amita Health, to protect sensitive business data led to a dispute that a judge had to resolve.

    U.S. Magistrate Judge Jeffrey Cole on Monday agreed with the hospitals that more precautions are needed to limit NorthShore’s and Advocate’s access to their strategic business plans, pricing, forecasts and other confidential information. His ruling poked fun at Advocate and NorthShore’s position.

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    In December, the FTC challenged the merger on grounds that it would reduce competition and harm consumers. In the runup to filing its antitrust lawsuit, the agency subpoenaed a number of hospitals for information about the marketplace.

    To defend their merger bid, NorthShore and Advocate asked the FTC to turn over the competitive information it relied on to bring the suit. The parties negotiated a confidentiality agreement in which only one executive each from Advocate and NorthShore could have access to highly sensitive data. They selected an Advocate in-house lawyer Eric Tower and Sean O’Grady, president of one of NorthShore’s hospitals.

    But Northwestern and others objected that such access created an unacceptable risk for inadvertent disclosure of their information. They wanted access restricted to outside lawyers hired by NorthShore and Advocate who have a professional obligation to protect information relating to representation of a client.

    The hospitals backed up their argument by researching the LinkedIn profiles of the two executives. They found that they were involved in strategic planning and business decisions, contrary to their court declarations.

    Full content: The Herald Dispatch

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