0

Both sides mulling next move in hospital acquisition challenge

From left, Phoebe Putney Health System CEO Joel Wernick and John Culbreath, chair of the Phoebe Putney Memorial Hospital board, sit side by side as a special called meeting of the board is opened on Monday morning. This meeting followed a ruling from the U.S. Supreme Court in the Federal Trade Commission’s favor regarding the purchase of Palmyra Medical Center.

From left, Phoebe Putney Health System CEO Joel Wernick and John Culbreath, chair of the Phoebe Putney Memorial Hospital board, sit side by side as a special called meeting of the board is opened on Monday morning. This meeting followed a ruling from the U.S. Supreme Court in the Federal Trade Commission’s favor regarding the purchase of Palmyra Medical Center.

ALBANY, Ga. -- Neither the Federal Trade Commission nor Phoebe Putney Health System is stating yet what its next move might be following a ruling last week from the U.S. Supreme Court, but indications are that the matter is not over yet.

In a slip opinion released Feb. 19, the Supreme Court unanimously ruled that Georgia had not clearly articulated and affirmatively expressed a policy to allow hospital authorities to make acquisitions that substantially lessen competition.

With the ruling, the high court reversed a lower court ruling and effectively sided with the FTC in its ongoing challenge of the acquisition of Palmyra Medical Center, now Phoebe North, by the Hospital Authority of Albany-Dougherty -- which owns Phoebe Putney Memorial Hospital -- and remanded the case for further proceedings.

The Phoebe Putney Memorial Hospital Board of Directors held a called meeting at 7:30 a.m. on Monday as a follow-up to the ruling. The majority of the meeting -- which was a little over an hour long -- was in closed session.

Following the executive session, Phoebe CEO Joel Wernick said that communications were ongoing as to what step to take next while health system officials remained in "watch and wait" mode. At the same time, Mitchell Katz, spokesman for the FTC, said that the agency had not publicly announced what move it will make next, but FTC officials have told The Albany Herald the agency will remain in touch.

The typical procedure following a decision from the Supreme Court is to give the parties involved 25 days to come back and claim that the justices got the ruling wrong and ask them to reconsider, which carries with it the potential for the ruling to be changed.

If reconsideration in this case is denied, then the decision from the Supreme Court is considered final, and the case will end up back in the hands of the 11th U.S. Circuit Court of Appeals via a mandate order. From there, it could potentially be remanded to the U.S. District Court for the Middle District of Georgia.

John Ley, clerk of court for the 11th Circuit, said on Monday that such a mandate order regarding the case had not yet been issued.

Christina Marsh, assistant professor of economics at the University of Georgia Terry College of Business and specialist in health economics, explained to The Herald on Monday how health care markets can be impacted by hospital mergers, noting that there are ways in which hospital mergers differ from business mergers in that hospital markets tend to be relatively small.

Marsh also noted that there can be pros and cons to following through with such mergers.

"If there is one hospital, there is not as much price competition, so there is no bargaining chip for insurance companies to keep the cost down," Marsh said. "Some research found in the '90s that HMOs went up. That may have been due to less bargaining power.

"On the other side, a hospital (that has merged with another) can be more efficient. If things are scaled up, it can be cheaper for patients."

U.S. District Judge Louis Sands ruled that the purchase of Palmyra was immune from federal intervention, a decision that was affirmed by the Court of Appeals in December 2011, allowing the $195 million purchase to go through.

The FTC appealed this ruling to the Supreme Court, and on June 25 the Court agreed to review the case and heard arguments on Nov. 26.

Comments

Trustbuster 1 year, 6 months ago

I agree with economist Marsh's first statement about the loss of bargaining power in insurance with just one hospital. How can things become scaled up with no competition?

0

FryarTuk 1 year, 6 months ago

"hospital markets tend to be relatively small." Boy is that a surprise comment. I wonder if the UGA professor is aware of the new medical school in Athens and the number of hospitals in Georgia. Her comment doesn't take into consideration the reach of hospitals into the general healthcare market to provide day units, outpatient services, specialty clinics and even doctors' offices. Sounds sort of a bit off the cuff. I know she's listed as an expert but healthare is a huge major commercial enterprise and hospitals are reaching for the helm. (With apologies to Capt. Eddie, still struggling to turn the tax skow around.)

Another surprising comment is "(Phoebe) health system officials remained in "watch and wait" mode." From what they were saying on television and reported in Sunday's paper, it seemed they were full steam ahead. It was Old Hickory redivivus.

Oh brother and not so surprising was " (the case) could potentially be remanded to the U.S. District Court for the Middle District of Georgia."

Another not so surprising note is the absence of a comment from our 'lustrously neutered Hospital Authority.

0

LikeItIs 1 year, 6 months ago

"On the other side, a hospital (that has merged with another) can be more efficient. If things are scaled up, it can be cheaper for patients."

Uh huh... So hows that working out for DOCO these days?

0

Sign in to comment