Last month, we reported on the Federal Trade Commission’s (FTC) steady filing of injunctions to block what are effectively local mergers of small health care providers. In 2007, the FTC filed suit in Saint Alphonsus Medical Center v. St. Luke’s Health System, its first successful challenge to a hospital merger in recent history. Since then, the Obama administration-appointed FTC has appeared bolder in its approach to health care mergers, which have been on the uptick since the passage of the still-existing Affordable Care Act has encouraged providers to coordinate health care services and provide better service at a lower cost.
The Saint Adolphus case was followed by two notable FTC filings to enjoin health care mergers in the Chicago, Illinois and Harrisburg, Pennsylvania areas. In both cases, the district courts denied the FTC’s request for preliminary injunction, which the U.S. Court of Appeals for the Third Circuit in Federal Trade Commission v. Penn State Hershey Medical Center, 838 F.3d 327 (3d Cir. 2016), and the U.S. Court of Appeals for the Seventh Circuit in Federal Trade Commission v. Advocate Health Care Network, 841 F.3d 460 (7th Cir. 2016), reversed. Since those decisions were handed down, Advocate Health Care and NorthShore University Health System—the entities involved in the proposed Seventh Circuit merger—are continuing to pursue the merger on remand to the district court. In contrast, Penn State Hershey Medical Center and Pinnacle Health System—the entities involved in the proposed Third Circuit merger—have apparently decided not to pursue the merger any further, citing the time and cost required to continue litigating the matter. Continue Reading