Recent Cases Offer Increased Prospects for Mergers by Competing Hospitals07.19.16
Recent setbacks experienced by the Federal Trade Commission (FTC) in hospital merger challenges may embolden hospitals and health systems considering potential combinations, especially in light of the need for coordinated care under the Affordable Care Act.
Earlier this month, the FTC voted unanimously to dismiss its challenge to a proposed merger between Cabell Huntington Hospital and St. Mary’s Medical Center in Huntington, West Virginia, as a result of the enactment of a new state law and the West Virginia Health Care Authority’s resulting approval of a cooperative agreement between the two hospitals.
In June, a U.S. District Court in Illinois ruled that the FTC could not block the merger of Advocate Health Care and NorthShore University Health System based on evidence presented during a week-long hearing, holding that the FTC had not provided sufficient evidence that the partnership would harm competition in in Chicago’s northern suburbs.
In May, the Middle District of Pennsylvania denied the FTC’s and Commonwealth of Pennsylvania’s motion for a preliminary injunction against the consummation of the proposed merger of Penn State Hershey Medical Center and PinnacleHealth System, pending the completion of the FTC’s administrative trial on the merits of the transaction.
For a detailed review of these and other recent developments in FTC antitrust challenges to hospital and health system transactions, please see our bulletin.