Federal judge rejects FTC challenge of PA health systems merger

A federal district judge yesterday rejected a Federal Trade Commission challenge of a proposed merger between Penn State Hershey Medical Center and PinnacleHealth System, denying the agency’s request to stop the merger while it completes an administrative trial. “The patients of Hershey and Pinnacle stand to gain much from a combined entity that is capable of competing with a variety of other merged and already growing hospital systems in the region,” wrote U.S. District Judge John Jones III, saying the agency’s antitrust claims were based on an “unrealistically narrow” four-county market. “This decision further recognizes a growing need for all those involved to adapt to an evolving landscape of health care that includes, among other changes, the institution of the Affordable Care Act, fluctuations in Medicare and Medicaid reimbursement, and the adoption of risk-based contracting. Our determination reflects the health care world as it is, and not as the FTC wishes it to be. We find it no small irony that the same federal government under which the FTC operates has created a climate that virtually compels institutions to seek alliances such as the Hospitals intend here.” For more information, see the health systems’ announcement.