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Judge refuses to block big Pennsylvania merger

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The slightly quaint Polyclinic Medical Center, in Harrisburg, Pa., part of Pinnacle Health.

U.S. District Judge John Jones III judge  has refused to temporarily block  the merger  of Penn State Hershey Medical Center and PinnacleHealth System, in a rare defeat for the Federal Trade Commission’s drive against many hospital mergers.

As Modern Healthcare has noted: “Hospitals and insurers across the country have been watching the Pennsylvania case and several others as mergers continue to proliferate. The loss comes as the FTC pursues an injunction in a hospital merger case in the Chicago area between Advocate HealthCare and NorthShore University HealthSystem. ”

“Judge  Jones rejected the FTC’s request for a preliminary injunction to stop the merger between Penn State Hershey, a 508-bed, not-for-profit health system in Dauphin County, and PinnacleHealth System, a not-for-profit, three-campus system with 607 beds, also in Dauphin County. He also slammed the FTC in his opinion for its opposition to such mergers in the current healthcare environment.

“He wrote that the FTC too narrowly defined the systems’ geographic market because the agency didn’t account for the distances many of their patients travel to reach the hospitals. He also wrote that the FTC did not include enough hospitals in its definition of the market.

He found it “compelling” that the hospitals have already worked with central Pennsylvania’s two largest insurers, CBC and Highmark, to ensure that their rates wouldn’t increase following a merger. Of course, who knows what would actually happen with those rates.

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