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Healthcare Business News
 


AHA urges FTC to allow mergers before a hospital is ready to close


By Joe Carlson
Posted: September 25, 2012 - 12:30 pm ET
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A hospital should not have to arrive at death's door before the Federal Trade Commission will allow it to merge with a competitor, lawyers for the American Hospital Association have written in a friend-of-the-court brief.

The Chicago-based trade group filed a 45-page amicus brief this week (PDF) in a case in the 6th U.S. Circuit Court of Appeals in Cincinnati, where judges are set to consider the FTC's order to unravel Toledo, Ohio-based ProMedica Health System's acquisition of its eighth hospital, 216-bed St. Luke's Hospital in Maumee, Ohio.

In a case being watched by hospitals nationally, federal regulators have argued that the “joinder” agreement between St. Luke's and ProMedica is likely to increase prices and decrease competition among healthcare providers in the greater Toledo market. The trade commission voted 4-0 last March to uphold an administrative law judge's order for ProMedica to divest the hospital because of the market clout it had acquired.

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ProMedica appealed to the 6th Circuit, arguing that St. Luke's would have eventually closed without a merger because of its financial straits. Judges have not yet announced a date for oral arguments in the case.

ProMedica President and CEO Randy Oostra said in a December 2011 interview that the FTC seemed prepared to accept a future in which ProMedica spent more than $100 million to build a competing hospital that would eventually force St. Luke's to close, rather than just allowing the system to buy the existing hospital outright.

On Monday the American Hospital Association weighed in, saying that regulators need to broaden the way they review hospital mergers to consider the dire financial futures facing scores of healthcare providers, some of which are caused by changes in federal reimbursements and government mandates to adopt costly health IT systems.

“The law should not force hospitals to wait to merge until they are in imminent danger of closing their doors,” AHA lawyers wrote. “If hospitals must tumble through the downward spiral, both patients and the community will suffer from disruptions in the quality and consistency of care as hospital services slowly deteriorate.”


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