US: FTC loses bid to block Advocate, NorthShore merger

A federal judge on Tuesday handed another loss to the Federal Trade Commission, denying its request to temporarily halt a merger between Chicago-area hospital systems Advocate Health Care and NorthShore University HealthSystem.

The proposed merger is one of the largest healthcare deals to be challenged by the FTC in years. The decision is the second loss in a row for the FTC, after years of scoring victories in such cases.

Advocate CEO Jim Skogsbergh praised the decision in a statement.

“Judge Alonso’s decision reaffirmed what we have wholeheartedly believed since day one—this merger is a big win for consumers and for healthcare in our country as the shift to value takes hold,”Skogsbergh said.

Debbie Feinstein, director of the FTC’s Bureau of Competition, in a statement Tuesday called the ruling “disappointing” and said the FTC will consider its options.

The FTC alleged that a combined NorthShore and Advocate would have enough bargaining leverage with insurers to increase prices because insurers would be hard-pressed to build marketable networks without Advocate and NorthShore hospitals. The FTC said a merger would lead to an 8%, or $45 million, price increase and the systems would control 60% of general-acute inpatient hospital services in Chicago’s north suburbs if they combined.

The systems, however, said that if their market were properly defined that figure would be closer to 28%. Advocate has 12 hospitals and NorthShore has four. The systems also promised, that if allowed to unite, they’d offer a new insurance product that would cost 10% less than the lowest-priced comparable product available, saving consumers $210 million to $1.1 billion a year.

Full Content: Daily Herald

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