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FTC challenges hospital merger

Commission says merger would increase health care costs, cut out competition

The Obama administration frequently touts the advantages of its comprehensive health care reform law, including the benefits that doctors and hospitals can reap when they partner to provide better care at lower costs. However, the Federal Trade Commission (FTC) is challenging one such merger in Toledo, Ohio, alleging it is anti-competitive and would increase health care costs.

ProMedica Health System and St. Luke’s Hospital agreed on a merger in August 2010 in order to provide collaborative, efficient and cost-effective care to patients, which is one of the main goals of the health care reform. The FTC, however, says the merger would increase ProMedica’s market share, which would allow it to force health insurance plans to pay higher rates to St. Luke’s and its 11 other hospitals in Ohio and Michigan. Higher rates would result in higher premiums and co-payments for consumers.

The case underscores the murkiness of the FTC’s guidelines about how antitrust enforcement agencies will treat merged health providers.

Ashley Post

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