A federal appeals court has paused a proposed merger between Downers Grove, Ill.-based Advocate Health Care and Evanston, Ill.-based NorthShore University HealthSystem.
Here are eight things to know about the Advocate-NorthShore merger and the appellate court's decision.
1. In 2014, Advocate and NorthShore unveiled plans to come together and create a new system called Advocate NorthShore Health Partners, which would include 16 hospitals. After a 15-month review, the FTC opposed the merger in December 2015.
2. Both sides presented testimony in April over whether the FTC's request for a preliminary injunction to halt the transaction should be granted. The FTC argued the merger would have anti-competitive effects. However, Advocate and NorthShore claimed the merger will not raise healthcare prices for consumers or reduce health insurers' bargaining power.
3. In an order issued June 14, U.S. District Judge Jorge Alonso denied the FTC's request to block the proposed merger. He said the government did not provide enough evidence that the partnership would harm competition in the region.
4. The FTC appealed the district court's decision, arguing the court's analysis of the geographic market was flawed.
5. On Monday, a three-judge panel of the 7th U.S. Circuit Court of Appeals reversed the lower court's decision that denied the FTC a preliminary injunction.
"Even with the deference we give a district court's findings of fact, the district court's geographic market finding here was clearly erroneous," the appellate judges wrote in the opinion.
6. The appellate court remanded the case for further action. The court ordered the merger to remain on hold while the lower court reconsiders the government's preliminary injunction motion.
7. Regarding the appellate court's decision, Debbie Feinstein, director of the FTC's Bureau of Competition, said, "The FTC is pleased that the 7th Circuit rejected the district court's geographic market findings, and we are looking forward to proving our case."
8. Advocate and NorthShore are disappointed with the decision. "We believe that blocking this merger will be a loss to consumers and further underscores the conflicting message with the objectives of the Affordable Care Act," the systems said in a joint statement, according to the Chicago Tribune. "While our legal teams review the decision, we remain confident our merger would lower costs and improve outcomes for consumers."
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