Advocate, NorthShore vow to pursue merger despite FTC complaint

Leaders of Advocate Health Care and NorthShore University HealthSystem said Tuesday they are still committed to a merger that would create the largest health care system in Illinois, despite the Federal Trade Commission's attempts to block it.

In December the Federal Trade Commission issued an administrative complaint to the proposed merger between the two suburban health care systems, saying it would bring "significant harm to consumers with rising health care costs and diminished incentives to upgrade services and improve quality."

Advocate and NorthShore leaders told the Daily Herald Editorial Board on Tuesday said they disagree with the conclusion and charge the FTC manipulated the market boundaries to make their case.

Mark Neaman, president and CEO of NorthShore University HealthSystem, said the two systems started the merger process 15 months ago and cooperated with the FTC to turn over 12 million documents.

"We are very, very disappointed," he said of the complaint. "It seems to us this is a bit of government overreach."

"We went into this feeling like our case was very compelling," said Jim Skogsbergh, president and CEO of Advocate Health Care.

They maintain that the merger would bring lower prices and better options for consumers.

"They will have access to more doctors, more physicians, more hospitals and it will be the cheapest option out there," Neaman said.

A spokeswoman for the FTC did not respond to calls for comment on Tuesday afternoon.

The agency, however, contends the merger would give the new system a more than 50 percent market share.

Neaman and Skogsbergh dispute that, and say that in the greater six-county region, the new system - to be called Advocate NorthShore Health Partners - would have only a 22 percent market share. They take issue with the boundaries the FTC used to come up with its number - a market that primarily focuses on the North Shore region. In that area, Skokie Hospital, Highland Park Hospital, Glenbrook Hospital and Evanston Hospital are owned by NorthShore and Condell and Lutheran General hospitals are owned by Advocate.

Skogsbergh said they did not get any explanation of how the FTC drew the boundary - and why Northshore Evanston Hospital was included inside it, but Presence St. Francis Hospital, also in Evanston, was not.

"They invented this boundary to make their case," Neaman said. "It's just gerrymandered and makes no rational sense."

Both leaders said another problem with the decision is that the FTC only considered inpatient hospitals, which make up only one-third of the health care systems' business.

Next, the issue is in the hands of federal Judge Jorge L. Alonso in Chicago for a bench trial starting April 6. If the merger is confirmed, hospital leaders said it would happen immediately.