The nine-hospital OSF Healthcare System, based in Peoria, Ill., owns the 235-bed OSF St. Anthony Medical Center in Rockford. Rockford Health System owns 293-bed Rockford Memorial Hospital.
In its request for a preliminary injunction to stop the acquisition, the FTC said the combined entity would control 64% of the local market for acute general hospital care after the deal and 37% of the market for primary-care physician services. In both service lines, the combined system would have only one remaining competitor, 312-bed SwedishAmerican Hospital.
“This significant consolidation would give OSF greater leverage to raise rates,” the FTC said in a news release, quoting allegations in its challenge of the merger. “OSF's proposed acquisition would increase the incentives and ability for the two remaining hospitals in Rockford to engage in coordinated anticompetitive behavior, including sharing confidential information, deferring competitive initiatives, or aligning managed care contracting strategies.”
In 1988, a federal judge granted an injunction to block a merger between SwedishAmerican Hospital and Rockford Memorial. SwedishAmerican also explored a merger with OSF in 1997, but that deal never materialized.
Attorneys with the FTC have been busy this year examining hospital mergers.
FTC officials filed a lawsuit to stop an acquisition of St. Luke's Hospital in Maumee, Ohio, by Toledo-based ProMedica Health System. A decision in that bench trial is still pending.
The FTC is also challenging the proposed acquisition of HCA's Palmyra Park Hospital in Albany, Ga., by local competitor Phoebe Putney Health System. The FTC has appealed a federal trial court's ruling that allowing that sale.