Arguments are scheduled to wrap up this week in a closely watched Federal Trade Commission case challenging a proposed merger between two Chicago-area health systems.
Lawyers for the FTC and for the systems looking to merge—Advocate Health Care and NorthShore University HealthSystem—are slated to offer closing arguments in Chicago on Wednesday. The FTC requested a preliminary injunction to pause the merger pending its own administrative proceedings on the matter.
Many are following the case as hospitals increasingly merge in what they say is an effort to lower costs and improve care, but others call it an attempt to boost negotiating power with insurers. The systems have said they won't pursue the merger if the FTC wins the preliminary injunction. The FTC doesn't typically continue challenging a tie-up in its own administrative hearings if it can't get an injunction.
Closing arguments are likely to focus on the hearing's central issues, such as whether the FTC correctly defined the systems' geographic market and whether the combined systems could cut costs and boost competition by offering a new insurance product, said Lisl Dunlop, a partner at Manatt, Phelps & Phillips.
The FTC alleges that the merger would lead to an 8% price increase—and that the combined systems would control 60% of general-acute inpatient hospital services in Chicago's north suburbs. The systems counter that if their market was properly defined that figure would be closer to 28%.
A decision in the matter might come within weeks of closing arguments. A federal judge recently denied the FTC's request for a preliminary injunction in a case challenging a proposed merger between Penn State Hershey Medical Center and PinnacleHealth System in Pennsylvania—handing the FTC a rare loss in its fight against hospital mergers it deems anti-competitive.
