ASC sues to block hospital's 'anticompetitive' acquisition: 5 details

A Marion, Ill.-based multispecialty ASC is testing President Joe Biden's executive order to scrutinize and halt acquisitions that would limit competition and increase healthcare prices.

Marion HealthCare, a surgery center with orthopedics, gastroenterology, general surgery and more, filed a lawsuit July 29 to challenge Southern Illinois Hospital Service's planned purchase of Harrisburg (Ill.) Medical Center. The surgery center cited President Biden's July 9 executive order to enforce antitrust laws written to prevent "excessive concentration of industry," particularly in healthcare.

"The effect of the proposed acquisition on the ... primary and corollary product markets would be to substantially reduce competition in those markets, limiting alternative, competing providers of hospital and ambulatory surgery services, thereby potentially raising costs to patients, reducing choice of institutional providers and physicians, and further, causing antitrust injury to Marion HealthCare," Marion HealthCare claims in the lawsuit.

Five details:

1. Marion alleges in the lawsuit that Southern Illinois Hospital has around 76 percent of the ambulatory surgery services market in a seven-county area that includes Marion HealthCare, a physician-owned facility. The lawsuit also notes Southern Illinois Hospital has 100 percent of ASCs in the area's two dominant counties.

2. The acquisition would further consolidate surgical services and referring physicians, as Harrisburg owns and operates multiple primary care and specialty clinics that refer patients to Marion HealthCare for outpatient surgery. The acquisition would disrupt these referral patterns because Harrisburg's physicians would refer patients to Southern Illinois Hospital's surgery centers after the transaction, Marion alleges.

3. Marion claims the acquisition is "anticompetitive" and would hurt its ability to recruit and retain surgeons to join the group and become owners.

"A reduction in the ability to attract new physicians and/or replace departing or retiring physicians has a substantial negative effect on Marion HealthCare's income and utilization and by extension, the availability, timeliness and efficiency of services to its patients," Marion said in the lawsuit.

4. The lawsuit also notes Marion provides group health insurance for employees through BlueCross BlueShield of Illinois, and the acquisition will allow Southern Illinois Hospital to charge higher prices because it has an exclusive provider contract with the insurer.

5. Marion HealthCare requests that the courts bar Southern Illinois Hospital from acquiring Harrisburg and prevent any future transactions between the two parties.

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