Health Care Matters, Summer 2016

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Special Masters in Health Care Antitrust Merger Cases: Resolving the Conflicting Interests -

One of the most challenging aspects of antitrust cases in the health care field is the rich mixture of public interest considerations, pro-competitive benefits, anticompetitive concerns, the backdrop of the Affordable Care Act (ACA) and the unknown about what will happen tomorrow. How will the courts rule in the context of the ongoing developments in change, consolidation and competition in health care? Will the challenged mergers and affiliations bring benefits to consumers? To the parties? To health care? How can counsel sort through the conflicting interests while also zealously advocating on behalf of their clients? Mergers, affiliations, patent licensing arrangements and purchasing and pricing arrangements between pharmaceutical companies, hospitals and insurers raise complex issues, and the results will have significant impacts on consumers and businesses in the health care field.

Three recent health care antitrust cases illustrate the point: FTC v. Advocate Health Care, et al.; FTC, et al. v. Penn State Hershey Medical Center, et al.; and ProMedica Health System, Inc. v. FTC. These cases arose out of challenges by the FTC to hospital mergers in the metropolitan Chicago; Hershey, Pennsylvania; and Lucas County, Ohio, areas, respectively. In each case, the merging hospitals asserted that the merger would produce economic and health care benefits. In Advocate Health Care, the hospitals promised that the merger would create a new low-cost, high performing network throughout the Chicago area, bringing benefits to consumers. In the Hershey case, the hospitals argued that their merger was in furtherance of finding innovative ways to best serve patients and the community by providing the “highest-quality and most cost-effective care possible.” ProMedica did not advance precompetitive benefits as a justification for its merger, but rather the absence of anticompetitive impact. The FTC’s complaints, on the other hand, alleged that the mergers would create dominant providers of general acute care inpatient hospital services in the relevant markets and would likely lead to increased health care costs and reduced quality of care.

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