Testimony ended last week in federal court in the U.S. Justice Department's antitrust lawsuit against the proposed merger of two Long Island, N.Y., hospital systems: Long Island Jewish Medical Center, based in New Hyde Park, and North Shore Health System, based in Manhassett.
The government sued the systems in U.S. District Court in June after a six-month investigation of the proposed merger. The systems, which proposed their merger last December, collectively operate a dozen acute-care hospitals (June 16, p. 2).
Specifically, the government charged the systems with a violation of Section 7 of the Clayton Act, which bars acquisitions that substantially reduce competition. The Justice Department says the systems are the only relevant acute-care providers in a two-county market.
During a 13-day hearing on the government's request for a preliminary injunction, the two sides brought nine witnesses each before U.S. District Judge Arthur Spatt in his Uniondale, N.Y., courtroom.
If Spatt grants the government's motion, the systems would be barred from merging until a decision on the merits of the government's antitrust charges against them.
Although testimony ended Aug. 27, the case is far from over.
By Sept. 19, both sides must file post-trial briefs with the court, and Spatt has scheduled closing arguments for Sept. 26.
The judge has offered no timeline for issuing a final ruling.
The case marks the first time the government has tried to draw competitive boundaries in a crowded urban market. The Justice Department contends the two systems want to join to keep managed-care plans from forcing them to lower their prices.
The hospitals, which have pledged to freeze their prices for two years, dispute the government's allegations. They say they wouldn't control an illegally high concentration of hospitals because they compete in a wide geographic market consisting of 42 other hospitals in four counties, including Manhattan. They also argue a merger would generate millions of dollars in cost efficiencies that would benefit consumers.