Three-hospital Evanston (Ill.) Northwestern Healthcare denied allegations by the Federal Trade Commission that its 2000 acquisition of Highland Park (Ill.) Hospital and the hospital's affiliated physician group was anticompetitive. In its first antitrust challenge to a hospital merger in six years, the FTC on Tuesday asked a court to order Evanston Northwestern to divest Highland Park and to refrain from setting prices for physicians not employed by the Evanston Northwestern faculty practice. Evanston Northwestern said it would fight the challenge. Responding to Modern Healthcare's request for comment, David Loveland, senior vice president of corporate relations at Evanston Northwestern, said the system controls 16% of the area market. "One reason we are so chagrined by the FTC action is that this is not a situation where we have dominant market clout," Loveland said. "The FTC decision has ignored the overwhelming proof of the enormous benefits of this merger."
The FTC alleged that the $200 million deal resulted in anticompetitive price increases for both hospital and physician services. Loveland said that the price increases cited by the FTC were one-time increases to make up for an estimated $80 million in lost revenue due to the Balanced Budget Act of 1997. The FTC challenge differs from previous hospital merger challenges because it alleges price fixing on behalf of physicians as well as hospitals, said healthcare antitrust lawyer David Marx of McDermott, Will & Emery. Marx is not associated with the case. -- by Mark Taylor