Tag: Hospitals and Clinics

The FTC challenged ProMedica Health System, Inc.’s consummated acquisition of rival St. Luke’s Hospital in Lucas County, Ohio. The FTC’s administrative complaint alleged that the deal will reduce competition and allow ProMedica to raise prices for general acute-care and inpatient obstetrical services. The FTC staff also filed a separate complaint in federal district court seeking an order requiring ProMedica to preserve St. Luke’s as a separate, independent competitor during the FTC’s administrative proceeding. The action in federal district court was brought jointly with the Attorney General of the State of Ohio. The PI hearing was held on February 10 and 11, 2011. The District Court granted the FTC's request for a preliminary injunction. With an Initial Decision issued on 1/05/2012, the Chief Administrative Law Judge D. Michael Chappell ruled that ProMedica Health System, Inc.'s consummated acquisition of rival St. Luke's Hospital harmed competition in violation of U.S. antitrust law and would allow ProMedica to raise the prices of general acute care inpatient hospital services in Lucas County, Ohio (the Toledo area). Judge Chappell ordered ProMedica to divest St. Luke's Hospital to an FTC-approved buyer within 180 days after the order becomes final. On 3/28/2012, The FTC issued its Opinion and Final Order in a 4-0 decision, ordering ProMedica to divest St. Luke's Hospital to an FTC-approved buyer within six months after the Commission order becomes final. ProMedica appealed to the Sixth Circuit, which upheld the Commission's order.

DaVita, Inc. agreed to divest its ownership interest in seven dialysis clinics – five in suburban and urban areas of New Jersey and two on the outskirts of Dallas, Texas – to proceed with its $358 million acquisition of competitor Renal Ventures Management, LLC. DaVita is the second-largest  provider of outpatient dialysis services in the United States and Renal Ventures is the seventh-largest. DaVita will divest the seven clinics to PDA-GMF Holdco, LLC, a joint venture between Physicians Dialysis and GMF Capital LLC. Physicians Dialysis has been in business since 1990 and currently operates several outpatient dialysis clinics. According to the FTC's complaint, the acquisition would lead to significant anticompetitive effects in the New Jersey markets of Brick, Clifton, Somerville, Succasunna, and Trenton, and in the Dallas-area markets of Denton and Frisco. Currently, DaVita and Renal Ventures clinics compete directly with each other in these markets, and the merger would represent either a merger to monopoly or a reduction of competitors from three to two. Without that competition, the likely result would be reduced quality and higher prices for dialysis patients. Under the terms of the proposed settlement, DaVita, Inc. must obtain agreements from the medical director of each divested clinic to continue providing physician services after it transfers ownership to PDA-GMF Holdco; obtain consent from the relevant landlords to transfer leases for the facilities to the buyer; and provide the buyer an opportunity to interview and hire employees from the divested clinics. Also under the proposed settlement, DaVita is barred from contracting with the medical directors of the seven clinics for three years, and it must provide transition services for up to 24 months.

The FTC issued an administrative complaint alleging that the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem will create the largest hospital system in the North Shore area of Chicago.  According to the complaint, the combined entity would operate a majority of the hospitals in the area and control more than 50 percent of the general acute care inpatient hospital services. The Commission also authorized staff to file for a preliminary injunction to maintain the status quo pending the administrative trial.

In the federal court proceeding, the district court denied the motion for a preliminary injunction on June 20, 2016, but granted plaintiffs' motion for a stay pending appeal.  On October 31, 2016, the Seventh Circuit reversed, and remanded the case back to the district court for further proceedings. On March 7, 2017, the district court granted an injunction, and the parties abandoned their merger plans.  On March 20, 2017, the Commission dismissed the administrative complaint.

The FTC issued an administrative complaint alleging that the proposed merger of Advocate Health Care Network and NorthShore University HealthSystem will create the largest hospital system in the North Shore area of Chicago.  According to the complaint, the combined entity would operate a majority of the hospitals in the area and control more than 50 percent of the general acute care inpatient hospital services. The Commission also authorized staff to file for a preliminary injunction to maintain the status quo pending the administrative trial.

In the federal court proceeding, the district court denied the motion for a preliminary injunction on June 20, 2016, but granted plaintiffs' motion for a stay pending appeal.  On October 31, 2016, the Seventh Circuit reversed, and remanded the case back to the district court for further proceedings. On March 7, 2017, the district court granted an injunction, and the parties abandoned their merger plans.  On March 20, 2017, the Commission dismissed the administrative complaint.