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Updated: 5:57 PM Feb 1, 2012
RHS, OSF Hospital Acquisition Heads to Court
Rockford Health System and OSF Healthcare have been trying to form a partnership for nearly two years, but the Federal Trade Commission has stepped in to try to prevent that deal--today it headed to federal court.
Posted: 4:45 PM Feb 1, 2012Reporter: Lauren Kravets |
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ROCKFORD (WIFR) -- Rockford Health System and OSF Healthcare have been trying to form a partnership for nearly two years, but the Federal Trade Commission has stepped in to try to prevent that deal--today it headed to federal court.
OSF St. Anthony Medical Center CEO Dave Schertz said, "We come together, we're a much stronger organization."
He says the acquisition of Rockford Health System would benefit patients.
Rockford Health System's CEO Gary Kaatz agrees.
He said, "We know there's an emerging model that benefits communities with regards to residencies, graduate medical education, better management of fixed costs, better investments in innovation and technology."
The Federal Trade Commission called witnesses to disprove that. A representative for insurance company United Healthcare says mergers tend to drive up costs. Kaatz disagrees.
Kaatz said, "We are price takers; Medicaid and Medicare set rates for us, manage care companies tend to follow the changes Medicare does with regard to payment. We are price takers, you can't be an anti-competitive monopolist when you take prices, we're not a price setter."
Kaatz and Schertz are even taking their message to our screens. Their commercial contests the FTC's decision and says the move will create competition here at SwedishAmerican hospital. Swedes, however, says it won't."
SwedishAmerican CEO Dr. Bill Gorski said, "I was surprised when I heard us being mentioned and that actually should this be approved that it would create a stronger SwedishAmerican, I do not know from where that came [from]. We believe as does the FTC, that acquisition threatens the competitive environment in our market."
However, Gorski says if an outside company were to merge with one of our local health providers, competition would remain because there would still be three individual hospitals.
Schertz said, "Swedes is reaching a position of dominance in the market, we're going to come together and provide them some real competition."
Rockford Health System and OSF have declined to comment further until the hearing is finished. This hearing on a temporary restraining order will last through Friday. A trial will then be held in Washington in April.
SwedishAmerican did try to merge with OSF in the late nineties but Gorski says that's because the hospital was in a weak financial position. He says currently, the hospitals are not.


