Antitrust lawyer Jeff Miles is quoted by Law 360 in an article on the denial of a Federal Trade Commission (FTC) motion for a preliminary injunction to block the merger of Advocate Health Care and NorthShore University HealthSystem. Earlier this year, the FTC lost a similar motion to block the merger of Penn State Hershey Medical Center and PinnacleHealth System.
An Illinois federal judge's Tuesday refusal to block a Chicago health system combination puts the Federal Trade Commission on a rare losing streak in hospital merger cases, and experts are anxious to see if the forthcoming opinion points to a need for the FTC to reconsider its approach to defining health care markets.
The fight over the relevant geographic market was a focal point of the Chicago merger litigation. The FTC and its co-plaintiff, the state of Illinois, argued that the deal would harm competition in Chicago's northern suburbs by combining the top two health care rivals in that area. But Advocate and NorthShore accused the government of gerrymandering its market to exclude hospitals that needed to be factored into a realistic analysis.
Jeff Miles, an antitrust lawyer at Ober|Kaler, also said that the market analysis from the Pennsylvania opinion might not carry over into the Chicago case, based on factual differences between the scenarios. He cautioned that observers shouldn't make too much of the FTC losing both preliminary injunction bids, nor should they assume that the Pennsylvania decision drove the outcome of the Chicago injunction trial.
"I think the hospitals' position on geographic market was probably stronger in the Illinois case than in the Pennsylvania case," Miles said.
Another distinction between the cases, Miles said, is that the two sets of hospitals presented different narratives to explain why they believed their mergers would produce efficiencies. The Pennsylvania health systems argued that the merger would allow Hershey to solve an overcrowding problem without undertaking an expensive construction project, while the Chicago providers argued that joining forces would enable them to offer a new insurance product that would save consumers money.