Apparently faced with a tough sell in federal court, a Florida hospital system is taking its battle with a competing Brevard County system to what it hopes is a more friendly state court.
At the same time it's seeking state approval to build a new hospital in the competing system's backyard.
In a rare hospital vs. hospital antitrust case, Wuesthoff Health Systems, which operates 239-bed Wuesthoff Hospital in Rockledge, Fla., sued Health First, a three-hospital system based in Melbourne, Fla., in February 1998 in U.S. District Court in Orlando, Fla.
Wuesthoff accused Health First of illegally coercing insurers to exclude Wuesthoff from their provider networks by offering plans deep discounts. They charge that Health First is attempting to monopolize the market in South Brevard County by excluding Wuesthoff.
Wuesthoff was seeking $120 million in damages.
According to the latest available data from the American Hospital Association, Wuesthoff controls 21% of the Brevard County market, while Health First controls 60% measured by both beds and admissions. Wuesthoff claims Brevard County is divided into three markets and alleges Health First's share in South Brevard County is 82% to 86%.
A trial date was set for September in Orlando. If U.S. District Judge Patricia Fawsett had ruled in favor of Health First's motion for a summary judgment, the case would have ended. Instead, on April 9, Fawsett granted Wuesthoff's motion to dismiss the lawsuit so it could refile in Brevard County Court in Melbourne.
Wuesthoff now has decided that a state court would be more sympathetic.
Wuesthoff's antitrust attorney, William Kopit of Epstein, Becker & Green in Washington, said Wuesthoff is seeking to have the state case, which has not been filed yet, tried before Brevard County jurors who know the area.
"We believe their antitrust suit has little merit," said attorney Steven Shonder, whose firm, Gardner, Carton & Douglas, represents Health First. "And I don't think they have a better chance of winning in state court."
Meanwhile, Wuesthoff has filed a certificate-of-need application with the Florida Agency for Health Care Administration's administrative hearings division to build a $50 million, 50-bed hospital in Melbourne. That facility would compete with two Health First hospitals, one in Melbourne and one in nearby Palm Bay.
The state agency rejected a 1996 Wuesthoff application to build a three-building medical center in Melbourne, and the denial was upheld on appeal. The new application, which combines medical offices and the 50-bed hospital into one building, was approved by the state.
But Health First challenged that decision, citing a likely increase in healthcare costs would result.