Another Looming Supreme Court Ruling: The Phoebe Putney-Palmyra Deal

The Supreme Court will review Albany, Ga.-based Phoebe Putney Health System's acquisition of Palmyra Park Hospital to determine whether state-granted antitrust immunity can trump Federal Trade Commission scrutiny, according to a Bloomberg Businessweek report.

The justices announced yesterday they will hear the FTC's appeal of an Atlanta-based 11th U.S. Circuit Court of Appeals ruling that the proposed acquisition could be carried out despite FTC objections.

A deciding principle in the Court of Appeals' decision was Georgia's Hospital Authorities Law, which was enacted in 1941. That law grants power to hospital authorities to "acquire by purchase, lease or otherwise…" projects, including hospitals. Phoebe is operated by the Hospital-Authority of Albany-Dougherty County.

The FTC has claimed Phoebe's $198 million acquisition of Palmyra would control 85 percent of the market, increasing the likelihood of higher healthcare prices.

Attorney Bob Baudino, JD, who represents Phoebe Putney, says he looks forward to the Supreme Court affirming the state action doctrine.

"In establishing the Georgia Hospital Authorities Law, the Georgia Legislature created a comprehensive mechanism for local governments to make local decisions on how best to provide access to healthcare for all, regardless of ability to pay, including the ability to acquire other hospitals even if competition is eliminated," Mr. Baudino said in a statement.

"This grant of power as put in practice by the Hospital Authority in Albany meets all the tests established by the U.S. Supreme Court over the years since 1943 under the Court's state action doctrine and precludes FTC review. Despite the FTC's continued challenges, it is Georgia law and we look forward to the U.S. Supreme Court affirming, as have the lower courts, the Hospital Authority's immunity from FTC merger review," Mr. Baudino said.

More Articles on Phoebe Putney and Palmyra Park Hospital:

FTC Notes Broader Effort to Promote Competition in Healthcare Sector
Varying Degrees of Consolidation: Why Creativity Matters in Hospital Transactions
FTC to Appeal Decision Allowing Acquisition of Palmyra Medical Center

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