Appeals Court Rejects Merger of Ohio Nonprofit Hospitals

A federal appeals court struck down a nonprofit northwest Ohio health system’s planned acquisition of a local community hospital Tuesday, saying the proposed union raises antitrust issues, writes The Wall Street Journal.

The unanimous ruling by a three-judge panel of the Sixth U.S. Circuit Court of Appeals in Cincinnati backed the Federal Trade Commission’s opposition to a 2010 merger pact between Toledo-based ProMedica and St. Luke’s Hospital. The regulatory agency says the deal would increase ProMedica’s dominance in the region’s medical market and lead to higher prices for patients.

The health-care network contends that the merger serves the Toledo area by rescuing a struggling hospital from insolvency. A ProMedica spokeswoman said the organization plans to appeal Tuesday’s decision. According to the Journal, the ruling signals a rougher road for hospitals that are more aggressively seeking mergers to establish economies of scale and boost their bargaining power with insurers.