Supreme Court Ruling Jeopardizes Georgia Hospital Acquisition
Feb. 19—The U.S. Supreme Court on Feb. 19 unanimously ruled that an acquisition involving Albany, Georgia-based Phoebe Putney Memorial Hospital is not immune from federal antitrust laws. The decision in Federal Trade Commission v. Phoebe Putney Health System, Inc., et al., reverses a lower court’s December 2011 ruling that the Federal Trade Commission (FTC), which had sought to block the acquisition, was not empowered to do so.
The FTC had previously argued that the acquisition of the former Palmyra Medical Center by the public entity that made the purchase, the Hospital Authority of Albany-Dougherty County, would “reduce competition significantly and allow the combined [organization] to raise prices for general acute care hospital services charged to commercial health plans, substantially harming patients and local employers and employees.” The hospital authority also owns Phoebe Putney Memorial Hospital, the only other hospital in the county.
The Supreme Court held that a government body’s involvement in the purchase does not provide immunity from antitrust scrutiny. Justice Sonia Sotomayor wrote that Georgia had not “clearly articulated and affirmatively expressed a policy to allow hospital authorities to make acquisitions that substantially lessen competition.”
“Although this case was narrowly focused on the question of state-action immunity, it raises larger issues surrounding consolidation in the healthcare industry,” says Joseph J. Fifer, FHFMA, CPA, President and CEO of HFMA. “Healthcare organizations are under increasing pressure to better coordinate care, achieve economies of scale, and right-size capacity, and consolidation is one route they are pursuing to achieve these goals. State and federal legislatures may need to reconsider how to facilitate the overriding goals of better quality and coordination at reduced cost.”
Publication Date: Tuesday, February 19, 2013