I am writing to respond to the article "Not-for-profits push for antitrust relief" (Feb. 3, p. 16), discussing the Federal Trade Commission's antitrust challenge to the merger of Butterworth Health System and Blodgett Memorial Medical Center in Grand Rapids, Mich. As antitrust counsel to the merging parties, I would like to clarify several points.
The article stated the district court judge found "the merger would create an illegal monopoly but refused to block it on the grounds that consumers probably wouldn't be hurt." The court did not find that the merger would create a "monopoly," nor that the deal would be "illegal." The court found that the FTC had established its prima facie case by demonstrating the merger would result in an increase in market concentration. Although this established a presumption of illegality, the judge found that the defendant hospitals "persuasively rebutted" both the FTC's case and its additional evidence regarding anti-competitive effects by demonstrating the interests of consumers are "likely to be advanced rather than hurt (by the merger) through the provision of more efficient, higher-quality and lower-cost healthcare."
The article also incorrectly stated that the hospitals sought "antitrust immunity because of their not-for-profit status." The hospitals' position is that in this particular case, there are numerous factors-including but not limited to the consumer representation on the hospitals' not-for-profit boards-that indicate consumers are likely to benefit from lower prices and higher quality as a result of the merger. So the merger of these particular hospitals shouldn't be blocked solely because "competition" in some abstract sense would be reduced.
Epstein Becker & Green, Washington