The Federal Trade Commission’s bid to block the merger of two large Chicago hospitals received a major setback Tuesday.
U.S. District Court Judge Jorge Alonso refused to issue a preliminary injunction to stop the merger of Advocate Health Care and NorthShore University HealthSystem in Chicago, stating the federal government failed to prove the deal would reduce competition in the area and increase the costs of healthcare services, reports Reuters.
His full opinion was sealed due to confidential business information, according to the news outlet. However, the Chicago Tribune reports that a public version of the opinion will be released later this week.
The ruling came as a surprise because many industry insiders expected the FTC to prevail given its success in recent years blocking mergers under the Clayton Antitrust Act, a 102-year-old law, FierceHealthcare previously reported. However, it’s the second recent ruling to reject an FTC challenge on mergers. Last month a federal judge ruled a merger between two Pennsylvania healthcare providers wasn't anticompetitive and they could proceed with their plans.
“The court’s ruling is disappointing and we will be considering our options,” Debbie Feinstein, the FTC’s competition chief, told The Wall Street Journal. However, the FTC only has four days to decide whether to appeal the decision, according to the Chicago Tribune.
The ruling paves the way for Advocate to join its 11 hospitals and a children’s hospital with NorthShore’s four hospital, creating the largest integrated healthcare delivery system in Illinois. In addition to providing the hospitals with greater bargaining power against Blue Cross and Blue Shield of Illinois, hospital leaders have said they will offer local employers a low-cost health plan that would limit access to providers within the merged organizations.
If the FTC decides not to challenge the ruling, Advocate and NorthShore told the Chicago Tribune it intends to form a new board of directors and integrate the hospitals’ operations.
- read the Reuters article
- here’s the Chicago Tribune story
- check out coverage by The Wall Street Journal