NorthShore lawyer: Why doesn't FTC include Northwestern in definition of Chicago's competitive market?

The federal administrative trial over the proposed merger of Evanston, Ill.-based NorthShore University HealthSystem and Downers Grove, Ill.-based Advocate Health Care began Monday, with the Federal Trade Commission highlighting the potential anticompetitive effects of the deal and NorthShore attacking the FTC's definition of competitive market.

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

In his opening statement Monday, NorthShore's lawyer, Dan Webb, argued the FTC left a major competitor off of the list of organizations that compete with Advocate and NorthShore, according to the Chicago Tribune.

The FTC's list of potential competitors includes Swedish Covenant Hospital in Chicago, Northwest Community Hospital in Arlington Heights, Ill., and Vista Medical Center in Waukegan, Ill. However, Mr. Webb argued the FTC's list should also include Chicago-based Northwestern Memorial HealthCare because the system has been one of NorthShore's major competitors for years.

"The question is why wasn't Northwestern included by the FTC?" Mr. Webb said during his opening statement, according to the Chicago Tribune.

If Northwestern, which includes seven hospitals and nearly 1,500 employed physicians, were included as a competitor, Advocate-NorthShore's market share would be much smaller than the FTC has alleged.

This isn't the first time this argument has been put forward. NorthShore CEO Mark Neaman told Becker's in January that the "FTC's assumptions regarding the Chicago market are based on an antiquated product model—inpatient admissions and a completely gerrymandered area."

Last December, when the FTC moved to block the merger, the commission claimed the proposed deal would lead to higher healthcare costs for consumers and diminish incentives for the combined entity to upgrade services and improve quality. On Monday, the FTC's lead lawyer, Tom Green, said the merger would cause prices at the hospitals Advocate and NorthShore would own in northern Cook and southern Lake counties to rise 8 percent, according to the Chicago Tribune.

More articles on antitrust issues:

Minnesota medical group merger draws antitrust inquiry
FTC official: 'The goals of the ACA and antitrust are in harmony'

 

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