The Federal Trade Commission and the Illinois attorney general’s office have filed an appeal of a court ruling that gave the go-ahead to a merger between Advocate Health Care and NorthShore University HealthSystem, according to Crain’s Chicago Business.
The FTC originally asked the U.S. District Court to issue a preliminary injunction to stop the merger of the Chicago hospitals, arguing it would harm competition and increase consumer costs. The systems, meanwhile, claimed the FTC overestimated their NorthShore market share by about 30 percent, saying the new system, Advocate NorthShore Health Partners, would instead pass savings of more than $1 billion on to consumers.
"We remain confident that our merger is in the best interest of consumers," representatives from Advocate and NorthShore said in a joint statement, according to Crain’s. "Judge [Jorge] Alonso’s decision reaffirmed our position and the realities of competition in the Chicago market. We look forward to a quick resolution."
The basis of the ruling was that Judge Alonso disagreed with how the FTC defined the hospitals’ market, David Dahlquist, a lawyer for NorthShore told the Chicago Tribune. In the FTC’s definition of the market, numerous major providers in the greater Chicago area, such as Northwestern Memorial Hospital, were excluded. Judge Alonso agreed with NorthShore and Advocate that the systems’ market was the entirety of Chicago, whereas the FTC argued that it was only a smaller area along Lake Michigan in northern Cook and southern Lake counties.
"We believe the facts and the evidence showed that there is broad competition in the Chicago marketplace, and patients have a lot of choices and options of where they can go,” Dahlquist told the Tribune.
Alonso's ruling came as a surprise because the FTC has been successful when it has challenged mergers in the past. However, the tide may be turning. Last month the FTC also lost its challenge to a merger of two Pennsylvania healthcare providers.
In addition to filing a notice to appeal the Chicago ruling, the FTC has asked Alonso to temporarily stop the hospital systems from completing their merger pending an appellate review of his ruling, according to the Tribune.