FTC Says Action to Block Merger of Grand Rapids Hospital will Help Keep Prices Competitive at all Area Hospitals.

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The Federal Trade Commission said today it will seek a federal district court order to block the proposed merger of Butterworth Hospital and Blodgett Memorial Medical Center, the two largest hospitals in Grand Rapids, Michigan. The FTC will allege that the merger would substantially reduce competition for acute-care inpatient hospital services in the Grand Rapids area. The two hospitals compete primarily with each other, the FTC said, and health care purchasers would not turn to other hospitals in the area if the merged firm raised prices. Thus, the merger would allow the combined firm to price its services anticompetitively, the FTC will allege.

The FTC will seek a preliminary injunction to prohibit the two hospitals from merging, pending the outcome of an administrative trial on the alleged antitrust law violations. If the FTC obtains the injunctive relief it is seeking in federal district court, it will have 20 days to issue an administrative complaint detailing its alleged antitrust law violations. The administrative complaint is the first step in the administrative trial process.

The Commission vote to authorize filing of the motion for a preliminary injunction was 3-0, with Chairman Robert Pitofsky recused and Commissioner Mary L. Azcuenaga not participating. This case was investigated by the FTC's Seattle Regional Office.

NOTE: The Commission files a complaint when it has "reason to believe" that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. The complaint is not a finding or ruling that the defendants have actually violated the law. The case will be decided by the court.

Copies of the court papers will be available upon filing 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. 951 0126)

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