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Published: Saturday, 1/15/2011

Hospital competition?

As federal judges and regulators review the acquisition of St. Luke's Hospital by ProMedica Health System, they must ensure that they do not end up reducing competition in northwest Ohio's health-care market in the name of preserving it. That would be the effect if St. Luke's were forced to close.

The Federal Trade Commission is suing to block, at least for now, the absorption of St. Luke's in Maumee into ProMedica, a process that began when the two institutions agreed to merge last May. FTC officials say the combination will illegally restrain competition and increase health-care costs for area patients and employers. A federal court in Toledo began hearing arguments in the case last week.

Leaders of St. Luke's say they are losing too much money to remain the area's sole remaining independent hospital. If they are denied the opportunity to join ProMedica, they told The Blade's editorial board last week, St. Luke's will shut down. “Ultimately, we will disappear,” said Jamie Black, the hospital's board chairman.

St. Luke's officials argue they have exhausted all other options to the ProMedica combination, including potential tie-ups with the region's other major health-care providers, Mercy and the University of Toledo Medical Center. Before ProMedica acquired St. Luke's, Mercy disdained a partnership, citing the hospital's “poor financial health” and “inability to raise capital.” By contrast, ProMedica says it plans to invest tens of millions of dollars in St. Luke's services and facilities.

The disappearance of independent hospitals in favor of mega-providers, in Toledo and across the nation, is lamentable. But it is a reality of modern medical economics, and it's hard to see how St. Luke's demise would enhance health care in the region.

FTC officials argue that the local market share the partners would gain from the merger would enable them to increase their prices excessively for various services, notably obstetrics and acute care. They will need to refute the assertion by St. Luke's and ProMedica that robust competition with Mercy, UTMC, and other providers will preclude that.

The new health-care reform law urges medical providers to offer a high-quality “continuum of care.” That requires investment in hospital capacity and improved coordination of services, which the ProMedica-St. Luke's deal seems to provide. Opponents must show why forcing the institutions to remain separate would enable either one to do the job better.

Before he left office this month, former Ohio Attorney General Richard Cordray joined the case on the FTC's side. His successor, Mike DeWine, has not indicated whether he will maintain the state's intervention. He needs to state his position promptly.

Whatever happens, the case ought not drag on forever. An FTC challenge to the hospital merger before an administrative law judge in Washington is not scheduled to begin until May 31 — more than a year after the deal was announced. St. Luke's shouldn't be expected to remain in limbo that long, and neither should its patients.



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