Appeals court blocks Advocate, NorthShore merger, no word yet on plans to appeal
Federal and state officials had raised the concern that both health systems operate hospitals in the northern suburbs of Chicago.
The two-year planned merger between Advocate Health Care and NorthShore University Health System in Illinois was blocked Monday by an appeals court.
The judge remanded the case back to the district court for reconsideration of a preliminary injunction. Meanwhile, the merger remains stayed and cannot move forward.
The health systems said by statement Monday that their legal teams were reviewing the decision. On Wednesday, Advocate said no decision had been reached on a potential appeal.
"We are disappointed in today's ruling that reverses U.S. District Court Judge Jorge Alonso's decision in favor of our merger and remands the case back for further review and consideration. We believe that blocking this merger will be a loss to consumers and further underscores the conflicting message with the objectives of the Affordable Care Act. While our legal teams review the decision, we remain confident our merger would lower costs and improve outcomes for consumers," the health systems said by statement.
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The Federal Trade Commission and State of Illinois brought the case after Advocate and NorthShore announced their intention to merge in 2014.
"The FTC is pleased that the 7th Circuit rejected the district court's geographic market findings, and we are looking forward to proving our case," said Debbie Feinstein, director of the FTC's Bureau of Competition.
Federal and state officials had raised the concern that both health systems operate hospitals in the northern suburbs of Chicago.
Speaking to the issue of competition, the district court said patients were willing to travel for care. However, the appeals court ruled that court erred by "overlooking the market power created by the remaining patients' preferences, something economist have called the 'silent majority' fallacy."
Combined, Advocate and NorthShore would be the 11th largest health care system in the country, according to the Chicago Tribune. The systems have said if they merged, they would offer an insurance product 10 percent less expensive than the next lowest-price comparable product available, saving consumers at least $210 million a year, according to the published source.
The FTC, however, said the deal would harm competition, leading to an 8 percent, or $45 million, price increase at the systems' hospitals.
Twitter: @SusanJMorse
