FTC v . Evanston Northwestern : A Change from Traditional Hospital Merger Analysis ?

3 4 · A N T I T R U S T ON N O V E M B E R 7 , 2 0 0 2 , then-FTC Chairman Timothy J. Muris delivered the Keynote Address to the Northwestern School of Law’s Seventh Annual Competition in Health Care Forum. In his address, Chairman Muris observed that after seven straight losses by the Federal Trade Commission and the Department of Justice in federal court it was obvious that the government’s template for trying these cases no longer worked. He announced that the Commission had established a new merger litigation task force that would be screening merger-case targets, selecting the best cases and developing new strategies for trying them. Chairman Muris also explained that the Commission was in the midst of a retrospective study of consummated hospital mergers designed to evaluate the effects of hospital mergers in several cities and that the Commission would be considering whether administrative litigation is appropriate if the studies were to indicate that a merger was anticompetitive. In February 2004, Complaint Counsel for the FTC filed the only complaint resulting from the retrospective study, alleging that the January 2000 merger of Highland Park Hospital with Evanston Hospital and Glenbrook Hospital to form Evanston Northwestern Healthcare Corporation (ENH) substantially lessened competition. On October 20, 2005, Chief Administrative Law (ALJ) Judge Stephen J. McGuire issued an Initial Decision finding that, “Complaint Counsel proved that the Challenged merger has substantially lessened competition in the product market of general acute inpatient services [sold to managed care organizations] and in the geographic market of the seven hospitals described above.” In explaining his decision, the ALJ wrote: