In the Matter of Evanston Northwestern Healthcare Corporation
Federal Trade Commission
Docket No. 9315 (F.T.C. August 2007)
Evanston Northwestern Healthcare Corporation (ENH) (defendant), which already owned two other area hospitals, merged with Highland Park Hospital (Highland) in 2000; ENH substantially raised prices both before and after the deal. Four years after closing, the FTC challenged the merger under Clayton Act section 7; ENH's own attorneys pointed to merger documents suggesting ENH had previously been undercharging patients, while opponents argued the price hikes stemmed from the merger's increased market leverage. The administrative law judge found a Clayton Act violation and ordered ENH to divest Highland.
Whether a healthcare merger resulting in increased market leverage and power, without merger-related benefits that outweigh anticompetitive effects, violates section 7 of the Clayton Act.