CHICAGO – Advocate Health Care and NorthShore University
Health System have declared, despite an appeals court ruling against their proposed merger, they
will still seek to merge.
The Federal Trade Commission (FTC) and the State of Illinois
were asking for an injunction against the merger. The FTC has said if the two
systems were allowed to combine their organzations, it would lead to higher costs to
patients and also be unfair to others in the industry.
In a statement
on their website, NorthShore has said that combining the two systems, “will
create a patient-centered, fully integrated delivery model to serve the Chicago
area. By focusing on new heath models, ANHP will work to improve the delivery
of care to all of the patients and communities it serves."
The plan to combine Downers Grove-based Advocate and Evanston-based NorthShore would create a body
that serves more than 3 million patients a year and would be the 11th
largest not-for-profit health care system in the country.
Three judges on the panel of the U.S. Seventh Circuit
Court of Appeals have left the decision about the injunction to a lower court.
Carmichael, a litigation
attorney for Holland & Knight,
said the case was not likely to land at the U.S. Supreme Court, saying the Seventh Circuit's decision is "very, very similar" to a decision reached in a hospital merger antitrust action favoring the FTC in the U.S. Third Circuit Court of Appeals.
“While they are interesting decisions and
they definitely help explain things, they don’t deviate substantially from any
existing law, so there wouldn’t really be a reason ordinarily for the Supreme
Court to become involved,” Carmichael said. He added
that the case would provide a “framework to analyze these types of mergers.”
In its decision, the Seventh Circuit said
the merger would “remain enjoined pending the district court’s reconsideration
of the preliminary injunction motion.”
Given the ruling, Carmichael said the health systems' willingness to push forward
did not appear to have an easy answer.
“It is very difficult to say how they would be approaching it,” he
said. “The appellate court's decision indicates they need to focus on the
insurance market and the insurance aspect, so I suppose that is what they would
be likely doing if they continue in the district court.”
Following the appellate decision, NorthShore issued
saying they were disappointed in the ruling.
“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," it said. "While our legal teams review the decision, we
remain confident our merger would lower costs and improve outcomes for
Carmichael said that a change in presidential administrations also was not likely
to impact the merger or court actions.
“There have been comments from the president-elect, obviously,
that were fairly tough on large mergers in general,” he said. “Certainly the statements that have been issued thus far don’t
indicate that there would be any real change in review of mergers in this type
of area at this point.”
He also said the FTC was not likely to be affected by a change
“The FTC has a bit of distance from the administration, from
different administrations and different presidents,” he explained, comparing it
to the antitrust division, which is housed in the Department of Justice.
“The FTC is a little more insulated and probably less prone to
major swings in policy, and that is the agency that is obviously dealing with