The Federal Trade Commission late last week dropped it antitrust challenge of the merger of the two largest hospitals in Grand Rapids, Mich. The decision came three days after the hospitals consummated their merger without FTC clearance and dared the agency to stop them.
The FTC sued the hospitals in January 1996, charging them with a violation of Section 7 of the Clayton Act, which bars acquisitions that may substantially reduce competition.
The hospitals are 529-bed Butterworth Hospital and 328-bed Blodgett Memorial Medical Center. They would control 70% of the beds in Grand Rapids.
Last fall a federal district court judge denied the FTC's motion to block the merger. A federal appeals court affirmed the ruling in July.
The FTC decided against appealing the case to the U.S. Supreme Court. And, it decided to withdraw its administrative antitrust complaint against the hospitals.
The hospitals also have been lobbying Congress to bar the FTC from continuing its case.
B.P. Sherwood III, board chairman of the new organization, Spectrum Health, said the hospitals decided to complete the merger for financial reasons.
"We made a five-point commitment to our community, which includes a three-year price freeze," he said. "In order to deliver on that promise, we cannot afford to wait another two years for a Federal Trade Commission administrative hearing."
Spectrum Health Chief Executive Officer Terrence O'Rourke said the two hospitals realized the risks involved. "We understood the possibility that the FTC could still act," he said.