FYI: Local Health System, Inc., Blue Water Health Services Corp., and Mercy Health Services

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The Federal Trade Commission has given final approval to a consent agreement with Local Health System, Inc., Blue Water Health Services Corp., and Mercy Health Services, settling charges over the proposed merger of Port Huron Hospital and Mercy Hospital-Port Huron. These are the two largest hospitals in St. Clair County, Michigan, and combining them would have violated antitrust laws, the FTC had alleged. The Commission action announced today makes the consent order provisions binding on the respondents.

The final order prohibits the merger, and requires the respondents, for three years, to obtain FTC approval before acquiring:

  • a majority of the assets of any acute care hospital facility operated by any of the other respondents in a five-city area called "Greater Port Huron";
  • any majority or controlling share of stock or other interest in any other respondent that operates any acute care hospital facility in Greater Port Huron.

Further, because future transactions regarding hospitals in Greater Port Huron likely would not have to be reported to the FTC in advance under federal law, the settlement requires the respondents to notify the Commission and wait 30 days before:

  • acquiring any stock in, interest in, or assets of any acute care hospital facility in Greater Port Huron;
  • entering into any agreement or other arrangement to obtain direct or indirect ownership, management or control of any acute care hospital facility in Greater Port Huron; and
  • permitting any acute care hospital facility each operates to be acquired by another entity that operates, or will operate immediately thereafter, any other acute care hospital facility in Greater Port Huron.

The consent agreement was announced for a public-comment period on July 3. The Commission vote to issue it in final form occurred on Oct. 3, and was 4-1, with Commissioner Mary L. Azcuenaga dissenting and issuing a statement in which she said: "Not having found reason to believe that the proposed merger of Port Huron Hospital and Mercy Hospital would be unlawful, I do not support the complaint and order."

NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.

A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release, the complaint and final order, and Commissioner Azcuenaga's statement are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov.

(FTC File No. 941 0076)
(Docket No. C-3618)

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