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FTC Final Order finds ProMedica’s acquisition of St. Luke’s Hospital presumptively illegal; orders divestiture

By  |  March 28, 2012

The Federal Trade Commission has found that ProMedica’s acquisition of St. Luke’s Hospital is anticompetitive. The FTC has thus voted 4-0 to order ProMedica to divest St. Luke’s Hospital within six months after the order is effective.

The FTC found that the acquisition was likely to lead to diminished competition and increased prices for the two Toledo, Ohio service markets of general acute-care inpatient hospital services and inpatient obstetric services sold to commercial health plans. Although the FTC’s market definition differed from the one employed by the ALJ in December 2011, Commissioner Julie Brill noted that “market shares and concentration levels exceed the thresholds for presumptive illegality provided in the 2010 Horizontal Merger Guidelines and the case law.” The merged hospital’s increase in market power would ultimately result in higher health care costs for all involved: patients, employers, and employees.

Full content: FTC Press Release

 

Related content: WARNING: Improper Use of the New Horizontal Merger Guidelines Can Result in Overly Narrow Markets, Mistaken Inferences of Market Power, and Wrong-Headed Analyses (Michael Doane, Competition Economics LLC; Luke Froeb, Vanderbilt Owen Graduate School of Management; Steven Tschantz, Vanderbilt University)