The Federal Trade Commission is requiring Toledo, Ohio-based ProMedica Health System to divest St. Luke's Hospital in Maumee, Ohio, citing anticompetitive effects of the systems' merger.
In a 4-0 decision, the FTC ruled that non-profit ProMedica's acquisition of St. Luke's in August 2010 is likely to substantially lessen competition and increase prices for general inpatient hospital services and inpatient obstetric services in the Toledo area. St. Luke's, also a non-profit, was formerly an independent hospital widely recognized for high-quality and low-cost services. ProMedica has six months to divest St. Luke's to an FTC-approved buyer.
The FTC's decision upholds an initial decision made be Administrative Law Judge D. Michael Chappell in December 2011. Judge Chappell found ProMedica's acquisition of St. Luke's reduced the number of competing hospitals in Lucas County from four to three. He also said the acquisition would increase ProMedica's bargaining power with commercial health plans, and the cost of higher reimbursement rates would then be passed on to customers of commercial health plans.
If ProMedica does not divest St. Luke's within the time constraints, the FTC may appoint a trustee to sell the assets. ProMedica can file a petition for review with a U.S. circuit court of appeals within 60 days of the FTC's Final Order, which was issued March 22.
FTC, ProMedica Hearing Scheduled for Next Month
Judge Sides With FTC; Says ProMedica, St. Luke's Partnership is Anti-Competitive
In a 4-0 decision, the FTC ruled that non-profit ProMedica's acquisition of St. Luke's in August 2010 is likely to substantially lessen competition and increase prices for general inpatient hospital services and inpatient obstetric services in the Toledo area. St. Luke's, also a non-profit, was formerly an independent hospital widely recognized for high-quality and low-cost services. ProMedica has six months to divest St. Luke's to an FTC-approved buyer.
The FTC's decision upholds an initial decision made be Administrative Law Judge D. Michael Chappell in December 2011. Judge Chappell found ProMedica's acquisition of St. Luke's reduced the number of competing hospitals in Lucas County from four to three. He also said the acquisition would increase ProMedica's bargaining power with commercial health plans, and the cost of higher reimbursement rates would then be passed on to customers of commercial health plans.
If ProMedica does not divest St. Luke's within the time constraints, the FTC may appoint a trustee to sell the assets. ProMedica can file a petition for review with a U.S. circuit court of appeals within 60 days of the FTC's Final Order, which was issued March 22.
More Articles on ProMedica and St. Luke's:
FTC's Stance Toward Hospital Mergers Grows More AggressiveFTC, ProMedica Hearing Scheduled for Next Month
Judge Sides With FTC; Says ProMedica, St. Luke's Partnership is Anti-Competitive