Attorneys for two Chicago-area hospital systems argued in federal court last week that a recent decision in a similar antitrust case in Pennsylvania supports the systems' case for being allowed to merge.
Attorneys for the Federal Trade Commission, meanwhile, posited that the judge in the Chicago case shouldn't follow the lead of the judge in the Pennsylvania case.
Closing arguments in federal court in Chicago capped eight days of testimony over whether the FTC's request for a preliminary injunction to temporarily halt a merger between NorthShore University HealthSystem and Advocate Health Care should be granted.
The FTC alleges that the merged entity would have enough bargaining leverage with insurers to increase prices because insurers would be hard-pressed to build marketable networks without their hospitals. The FTC says a merger would lead to an 8%, or $45 million, price increase and the systems would control 60% of general-acute inpatient hospital services in Chicago's north suburbs.
The systems, however, say that if their market were properly defined, that figure would be closer to 28%. Advocate has 12 hospitals and NorthShore has four. The systems say the FTC wrongly excluded competitors such as Northwestern Memorial Hospital, Rush University Medical Center and Presence St. Francis Hospital from their supposed market.
The systems also say that if they're allowed to unite, they'll offer a new insurance product that would cost 10% less than the lowest-priced comparable product available, saving consumers between $210 million and $1.1 billion a year.
During closing arguments, attorneys discussed those points and the Pennsylvania decision. Earlier this month, a federal judge handed the FTC a rare loss in a hospital merger case, refusing to grant it a preliminary injunction to stop a merger between Penn State Hershey (Pa.) Medical Center and PinnacleHealth System in Harrisburg. The deal is still on hold pending an appeal by the FTC.
The hospitals' attorneys cited that decision as support for their case, while FTC Attorney Daniel Zach said the Pennsylvania judge used outdated and incorrect standards to define the geographic market.