NorthShore CEO: FTC gerrymandered hospital market to oppose merger

Evanston, Ill.-based NorthShore University HealthSystem CEO Mark Neaman has accused the Federal Trade Commission of gerrymandering, claiming the agency is only analyzing a small portion of the Chicago area's healthcare market to challenge NorthShore's merger with Downer's Grove, Ill.-based Advocate Health Care, according to the Chicago Tribune.

In December, the FTC authorized action to block the planned NorthShore-Advocate merger, and the Illinois Attorney General joined the FTC in the matter. The deal was subsequently halted when both hospital chains and the FTC agreed to a temporary restraining order to stop the transaction.

In an administrative complaint, the FTC claimed if NorthShore and Advocate combined they would operate a majority of the hospitals in the combined system's competitive geographic market, composed of northern Cook and southern Lake counties.

However, Mr. Neaman claimed the FTC isn't looking at the full picture. In a meeting with the Tribune's editorial board, Mr. Neaman said the combined entity would compete with hospitals throughout Chicagoland, not just in northern Cook and southern Lake counties, and it would have 22 percent of inpatient beds in the six-county Chicago area market.

Mr. Neaman also took issue with the FTC's exclusion of some very close competitors in its analysis. For instance, the agency did not include Presence St. Francis Hospital in Evanston in its analysis, even though the hospital is only a few miles from one of NorthShore's hospitals.

"It seems kind of strange that you can gerrymander something like this and think for a moment that somebody can't drive from north Evanston to south Evanston," Mr. Neaman told the Tribune's editorial board. "And yet, with all of their work to try to come up with this geography, which suits their purposes, they had to work really, really, really, really hard to get it to just over 50 percent."

Although the antitrust battle could take months to resolve, both Advocate and NorthShore have said they remain committed to the deal and will fight the FTC's attempt to prevent the transaction, according to the report.

More articles on antitrust issues:

FTC official: 'The goals of the ACA and antitrust are in harmony'
Researchers use hospital prices to show need to 'combat market power'
How ACOs can avoid antitrust scrutiny

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