Dec. 24--Advocate Health Care and NorthShore University Health System have put their merger on hold, after the Federal Trade Commission challenged the deal on antitrust grounds, court documents show.
The FTC and the hospital chains agreed to a temporary restraining order to stop the merger, which a federal judge approved Tuesday. Without the restraining order, the hospital chains could have consummated their merger as early as Friday.
The FTC, joined by the Illinois attorney general, still seeks an injunction to prevent the companies from closing their merger so the agency can proceed with a full examination of the proposed transaction in an administrative trial to begin in May in Washington. The FTC alleges that the combination will unfairly reduce competition in the north suburbs.
The hospital chains have said the merger will lower costs and improve care. They plan to oppose the FTC.
Advocate agreed to acquire NorthShore in a deal announced in September 2014. The FTC said the proposed transaction is valued at $2.2 billion. Advocate, the state's largest hospital chain, owns 11 general hospitals and a two-campus children's hospital. NorthShore owns four hospitals. The combination would have revenues of more than $7 billion.
The combined entity would own six of the 11 hospitals in northern Cook and southern Lake counties and control 55 percent of inpatient admissions, the FTC said. The next closest competitor, Northwest Community Hospital in Arlington Heights, would draw only 15 percent of admissions.
The FTC says the elimination of competition between Advocate and NorthShore would increase the merged entity's bargaining power with health insurance companies and lead to higher reimbursement rates. Faced with higher rates, insurers will be forced to pass those higher health care costs on to employers and their workers through increased premiums, copays, deductibles and other out-of-pocket expenses, the FTC said in the lawsuit.
U.S. District Court Judge Jorge Alonso is scheduled to hear the agency's arguments for an injunction starting April 6.
asachdev@tribpub.com
