A federal judge is expected to issue a ruling in December on the U.S. Justice Department's effort to block a proposed consolidation of the only two hospitals in Dubuque, Iowa.
U.S. District Judge Michael Melloy in Cedar Rapids, Iowa, last week scheduled Dec. 5 closing arguments from government lawyers and attorneys representing 320-bed Mercy Health Center and 124-bed Finley Hospital. The lawyers presented evidence in a just-completed trial before Judge Melloy, and his ruling could come on Dec. 5, court officials said.
"We are concerned about this proposed merger," said Claudia Greenleaf, manager of healthcare communications at John Deere Health Care, which provides a health plan to Dubuque's largest employer, John Deere Dubuque Works.
James Thomson, vice president of operations at John Deere Health Care, and Mark Runde, M.D., director of Mercy's medical staff, were key government witnesses against the proposed combination.
John Deere Health Care said its plan didn't want to see history repeat itself at another of the company's plant locations. In 1987, Deere didn't object to the merger of the only two hospitals in Ottumwa, Iowa, and saw its healthcare costs rise 20%, Deere executives said.
In that merger, St. Joseph Health and Rehabilitation Center merged with Ottumwa Regional Health Center and formed a 90-bed facility. John Deere Health Care covers 5,100 people in the Ottumwa area.
"We think a merger like this causes a monopoly," Ms. Greenleaf said. "We didn't take a stand in Ottumwa, and now it's one of our highest-cost areas. We are very concerned and want to keep hospital costs in line."
More than 90% of Dubuque-area residents use the two hospitals in the city of 86,000 people, which is located on the Mississippi River at the junction of Iowa, Illinois and Wisconsin. John Deere Health Care covers 14,000 employees, dependents and retirees in the area.
Both hospitals are operating in the black and generate annual profits. Mercy and Finley plan to form the Dubuque Regional Health System (Aug. 29, p. 17). Combined, they had more than $112 million in revenues in 1993, according to HCIA, a Baltimore-based healthcare information firm.
Hospital executives have said the system will control rising costs and strengthen Dubuque's position as a regional healthcare center. They anticipate savings of $24 million within four years.
The hospitals face competition from facilities within a 150-mile radius of Dubuque, said Sister Helen Huewe, president of Mercy. The hospitals have cited competition from as far as Rochester, Minn.; Rockford, Ill.; and Madison, Wis.
They also have insisted their venture isn't a merger.
A partnership agreement was signed in February by the hospitals' parent corporations, Sisters of Mercy Health Corp. of Farmington Hills, Mich., and the Finley Tri-States Health Group of Dubuque. It would allow each to maintain its own assets and identity.
During the two-week trial, which ended Oct. 7, the government called seven witnesses and the defense called 10. The trial was held in Dubuque, but closing arguments and the ruling will be in Cedar Rapids, Iowa.
The lawsuit is only the fourth Justice Department antitrust challenge of a not-for-profit hospital merger.