Northshore University Health System, which recently became part of a new larger hospital and health system known as Endeavor Health, has agreed to pay $55 million to end a decade-and-a-half long class action lawsuit stemming from claims Northshore used past hospital acquisitions to corner the market on health care services in Chicago's north suburbs and raise prices 24 years ago.
Under the settlement deal announced in federal court, the lawyers who led the lawsuit could ask the court to award them as much as one-third of the total funds, or about $18 million, as attorney fees.
A memorandum filed with the court in support of the settlement does not estimate how many class members will be paid from the settlement, nor how much money class members can expect to receive. Potential class members could include anyone who paid out of pocket for inpatient health services through Northshore from 2000-2015.
Matthew Van Tine
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On Jan. 17, attorneys from the firm of Miller Law LLC, of Chicago, asked U.S. District Judge Edmond Chang to sign off on the settlement.
If approved, the deal would end 16 years of litigation in Chicago courts over the antitrust claims leveled against Northshore.
The lawsuit began in 2007, seven years after Northshore, which had been known as Evanston Northwestern Healthcare completed a merger with Highland Park Hospital. The company would later rebrand itself to Northshore University Healthsystem and acquire a Skokie hospital.
The lawsuit was brought by a group of patients and health insurers who claimed Northshore essentially created a monopoly over health care services in the north suburbs and then used that monopoly to raise prices.
The class action was led by named plaintiff David Freedman.
In response, Northshore claimed the price increases were planned before the merger, at the recommendation of consultants from the firm of Bain & Co.
Concern over the price increases reached the Federal Trade Commission, which filed an administrative complaint regarding the merger. The FTC ultimately ordered Northshore to allow payors and managed care organizations, including health insurance providers, with pre-existing contracts to negotiate those deals in 2008. No MCO engaged in that process.
Northshore failed on numerous occasions to persuade courts to end the lawsuit.
However, in the motion in support of the settlement, plaintiffs' attorneys said the company still had strong potential defenses. They said the company could still persuade a jury that the plaintiffs did not define the geographic market Northshore allegedly "monopolized." Further, the plaintiffs' attorneys noted Northshore intended to introduce testimony from health insurance giant Blue Cross Blue Shield that the price increases did not harm them.
With trial imminent, however, the two sides entered another round of settlement talks, which had happened "sporadically since ... 2012," according to the memo.
The settlement memo indicated class members will be paid from the net settlement funds remaining after plaintiffs' lawyers and settlement administration costs are paid.
A footnote on the settlement memo indicates class members would receive a minimum payment of $10 each. It does not estimate the maximum payment amount class members could expect.
Settlement documents note that previous class definitions in the case would have included those who received outpatient health services through Northshore, as well. However, those potential class members were removed from the settlement during negotiations, according to settlement documents.
Lawyers who could receive a cut of the $18 million in attorney fees potentially available through the settlement include Marvin A. Miller, Matthew E. Van Tine, Kathleen E. Boychuck, Andrew Szot and Lori A. Fanning, of the Miller Law LLC firm, of Chicago.
While those attorneys served as signatories on settlement motion documents, plaintiffs have also been represented in the past by attorney Joseph M. Burns, of the firm of Jacobs, Burns, Orlove & Hernandez, also of Chicago.
Northshore was represented in the case by attorney Dan K. Webb, of the firm of Winston & Strawn, of Chicago.
In December 2023, Northshore announced its hospitals and clinics would now operate under the Endeavor Health brand, which was the name given to the health system created following the January 2022 merger between Northshore and Edward-Elmhurst Health. That merger created the third largest health and hospital system in Illinois, serving a geographic area in Chicago and its suburbs including more than 4.2 million people.