Advocate, NorthShore merger moving ahead despite court loss

A deal to create the 11^th largest nonprofit hospital system in the U.S. is going forward despite courts siding with the Federal Trade Commission (FTC) on temporarily blocking the merger.

Downers Grove, Illinois-based Advocate Health Care, the largest hospital chain in the state, and the four-hospital NorthShore University Health System released a joint statement to HealthExec saying even though the FTC was granted a preliminary injunction by an appeals court, they will continue to defend the deal, citing its earlier win in district court.

“We remain steadfast in our belief that bringing our organizations together is the right thing to do for consumers and therefore we are choosing to move forward with our case,” their joint statement said. “We are confident that Judge Jorge Alonso made the right decision in our favor this past summer, reaffirming the competitive realities of the Chicago market. We look forward to a positive resolution—paving the way for an innovative care delivery model to further advance quality and lower costs.”

The FTC successfully argued on appeal the merger would hurt competition in Chicago’s north and northwest suburbs, with the combined system controlling more than 50 percent of the acute inpatient care services in the area. Advocate and NorthShore said that was an exaggeration, putting the real market share of their consolidated systems at 30 percent.

The networks brought in more $7 billion in revenue combined last year.

By moving forward with the deal despite FTC’s win, the systems are taking a different path than another proposed merger. Penn State Hershey Medical Center and Pinnacle Health System in Pennsylvania had also won a district court battle against an injunction, but when an appeals court sided with the FTC, the two systems called off the deal.  

The next step will be an administrative hearing before the FTC. It was originally scheduled to take place Nov. 21, but has since been delayed.