Two Chicago-area health systems won't be allowed to merge just yet despite prevailing earlier this week in federal court against the Federal Trade Commission, which is trying to stop the deal.
U.S. District Court Judge Jorge Alonso agreed Friday to temporarily block the merger between Advocate Health Care and NorthShore University HealthSystem pending the FTC's appeal of his first decision earlier in the week. In that previous decision, Alonso denied the FTC's request for a preliminary injunction to pause the deal while the FTC considered the matter in its own administrative proceedings.
The FTC has decided to appeal that decision to the U.S. Court of Appeals for the 7th Circuit.
The systems said in a statement Friday that the judge's decision to put the merger on hold pending the FTC's appeal wasn't unexpected.
“We remain confident that our merger is in the best interest of consumers,” according to the statement. “We look forward to a quick resolution.”
Advocate CEO Jim Skogsbergh told Modern Healthcare earlier this week that the systems wanted to close the deal right away, following the judge's initial decision.
Leaders of Advocate and NorthShore have said a marriage between them will lead to high quality care at lower prices. Advocate has 12 hospitals and NorthShore has four. The systems have promised that, if allowed to unite, they'd offer a new insurance product that would cost 10% less than the lowest-priced comparable product available, saving consumers $210 million to $1.1 billion a year.
The FTC, however, has alleged that a combined NorthShore and Advocate would have enough bargaining leverage with insurers to increase prices because insurers would have a tough time creating marketable networks without Advocate and NorthShore hospitals. The FTC has said 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 say their market share would be closer to 28% if their market were properly defined.
