Dogged by two recent failed attempts to block hospital mergers in the Midwest, the federal government goes to court this week to challenge a consolidation in Grand Rapids, Mich.
A hearing is set to start on the Federal Trade Commission's request for a preliminary injunction to halt the joining of 515-bed Blodgett Memorial Medical Center and 529-bed Butterworth Hospital, Grand Rapids' largest acute-care providers.
In a meeting with attorneys, U.S. District Judge David W. McKeague in Lansing, Mich., has said he expects the FTC to explain at the hearing how the proposed merger differs from those in Joplin, Mo., and Dubuque, Iowa.
The FTC and the Justice Department, respectively, lost those antitrust cases last year when local federal judges sided with the hospitals. The Dubuque case is under appeal.
The FTC contends that the Grand Rapids hospitals compete primarily against each other, and purchasers would not turn to other hospitals if the merged firm raised prices. The hospitals argue that the market extends to at least 13 Michigan counties from which they draw patients, rather than a much narrower territory defined by the FTC. Similar boundary arguments were made by hospitals in Dubuque and Joplin.
McKeague, a lifelong Lansing resident, has asked the Grand Rapids hospitals to define the limits of their market in terms of both geography and services, said FTC Assistant General Counsel Ernest Isenstadt.
McKeague set a limit of five days for the hearing, and much of the testimony has been submitted in writing.
Lead counsel for the FTC is Melvin Orlans. William Kopit of the Washington-based firm Epstein, Becker & Green is lead counsel for the hospitals.
The hospitals have hired Washington economist David Eisenstadt. The FTC's economist is Keith Leffler, who is on the staff of the University of Washington in Seattle.