In the last two issues of Manatt Health News, we reported on two recent antitrust developments:

  • The 9th Circuit’s decision in the St. Luke’s merger case and
  • The FTC and DOJ’s healthcare workshop.

Since those reports, there have been some further developments worth noting.

St. Luke’s Applies for a Rehearing

The defendants in St. Luke’s have applied for an en banc rehearing (a hearing by the full bench of the court) of the 9th Circuit decision. On April 7, a group of prominent antitrust professors filed an amicus brief supporting the rehearing. Their brief expressed concern that the 9thCircuit panel’s positions on proof of efficiencies—for example, showing that the merger would allow St. Luke’s to serve patients more effectively was insufficient, and that the district court at most concluded that the hospital might provide better service post-merger—are contrary to the antitrust agencies’ Horizontal Merger Guidelines and may deter transactions that otherwise would promote consumer welfare.

We are waiting with interest to see whether the 9th Circuit takes on the efficiencies argument. Continue to watch Manatt’s “Health Update” for the latest developments.

Hospital Associations Criticize FTC/DOJ Healthcare Workshop

Following the Federal Trade Commission’s (FTC) and Department of Justice’s (DOJ) “Examining Healthcare Competition” workshop in February this year, several hospital associations wrote to the FTC and DOJ criticizing the lack of hospital representation over the two-day hearing, which they claim was hostile to hospital interests.1 In particular, the associations raised concerns about the workshop’s characterizing hospitals as seeking leverage over health insurers and increases in Medicare payments, while overlooking quality and other key reasons for hospital collaboration and consolidation.

The agencies responded, stating that the workshop team consulted with numerous stakeholders in the healthcare industry, but the 14 hospital systems or representative organizations that the staff reached out to either declined to speak to them or to participate in the workshop.2 The agencies also pointed to the presence of several panels that did include hospital perspectives.