An appeals court tossed out an antitrust case once considered precedent-setting for mergers involving the only two hospitals in a community.
The closely watched case involved the proposed mergerlike partnership of both hospitals in Dubuque, Iowa, 415-bed Mercy Health Center and 158-bed Finley Hospital.
The U.S. Justice Department filed an antitrust lawsuit against the hospitals to block the deal, but the hospitals won the case in federal district court. The government appealed, and oral arguments were held before a three-judge panel of the 8th U.S. Circuit Court of Appeals in St. Paul, Minn., last fall.
But before the appeals court reached its decision, Finley backed out of the deal with Mercy to pursue a partnership with six-hospital Iowa Health System of Des Moines (Jan. 27, p. 17). Finley President Kevin Rogols said the Mercy deal grew less attractive with the passage of time, and he didn't want to continue the legal battle.
In a Feb. 26 decision, the 8th Circuit said the antitrust case was moot. Both the hospitals and the Justice Department had asked the appellate court to render a decision in the case regardless of the status of the deal.
The case was considered particularly important in establishing policy regarding the definition of market share. In ruling against the Justice Department, the federal district court said determination of a competitive market must be based on where patients could go after a merger, not on historical patient-origin data.