Judge rules Advocate-NorthShore merger can proceed

A federal judge said June 14 Chicago-area Advocate Health Care and NorthShore University HealthSystem can merge, despite a formal complaint from the Federal Trade Commission (FTC) late last year and opposition from Illinois Attorney General Lisa Madigan.

The two sides argued their cases during a six-day hearing in April.

The FTC protested the merger because it could drive up patient prices. Combining the 12 Advocate hospitals and the four NorthShore hospitals would give the newly created partnership a more than 50 percent market share of acute care hospitals in Chicago’s north and northwest suburbs. The Associated Press reported that the merger would make the new Advocate NorthShore Health System the 11^th largest not-for-profit health system in the U.S., with three million patients a year.

The two health systems disputed this monopoly argument, saying the merger would only give the companies, currently competitors, a 28 percent share if the market were properly defined, reported Crain’s Chicago Business.

U.S. Northern District Judge Jorge Alonso denied the FTC’s request for an injunction, ruling the FTC failed to show their anti-trust argument had merit. The judge’s full opinion is sealed until June 17 to protect the parties’ “competitively sensitive information” within.

Representatives for the health systems said the decision would help their hospitals serve their patients better.

“We believe that by bringing together our two very strong and complementary institutions we are creating a patient-centered ‘system of systems’ that will deliver exceptional care and unprecedented access for those who matter most – our patients,” the president and CEO of NorthShore Mark Neaman told the AP.

But the FTC warned the process might not be over—they can appeal the order to a higher court.  

FTC Director of the Bureau of Competition Debbie Fenstein told the Chicago Tribune, "The court's ruling is disappointing and we will be considering our options.”

A spokesperson for Madigan echoed those sentiments.

A federal judge in Pennsylvania ruled against the FTC in a similar case last month. That ruling said Penn State Hershey Medical Center and PinnacleHealth System can merge. Two such losses in a row is an unusual record for the FTC, Crain’s noted. Some say this pattern could set a precedent for similar mergers in the future.