The health system's M&A planning should closely consider the implications of the government's latest litigation victory in its challenge to a concentrated market hospital merger. The strategic planning committee would benefit from a briefing on the March 7 decision enjoining the proposed Advocate Healthcare Network/NorthShore University Health System merger in the Chicago area.
The District Court granted the Federal Trade Commission (FTC) and the State of Illinois a preliminary injunction blocking the merger from closing, pending an administrative trial on the merits before an FTC administrative law judge. Rather than continue to litigate, Advocate and NorthShore immediately announced their intention to abandon their proposed merger.
This is the second decision in a year in which the FTC has successfully challenged, by litigation, a concentrated hospital market merger (the other being the proposed Penn State Hershey/PinnacleHealth System merger in Pennsylvania). Both decisions adopted the FTC's approach to defining geographic markets by taking into account the views of payors and, specifically, what alternatives to the merging parties they believed they had in negotiations to form a provider network to market to employers and individuals.
It should also be noted that in both the Hershey and Advocate cases, the FTC voted unanimously for the filing of a complaint; there was no split among the FTC's Republican and Democratic commissioners along political lines.