Penn State, Pin­na­cleHealth drop merger af­ter ap­peals court loss

Penn State Her­shey (Pa.) Med­i­cal Cen­ter and Pin­na­cleHealth Sys­tem, Har­ris­burg, Pa., aban­doned their pro­posed merger in the wake of re­newed reg­u­la­tory op­po­si­tion from the Fed­eral Trade Com­mis­sion.

Modern Healthcare - - REGIONAL NEWS - —Erica Te­ichert

In Septem­ber, the 3rd U.S. Cir­cuit Court of Ap­peals re­vived the FTC’s an­titrust chal­lenge to the pro­posed hos­pi­tal merger, paving the way for an ad­min­is­tra­tive trial prob­ing the al­leged an­ti­com­pet­i­tive ef­fects of the deal. Rather than en­dure a long, costly bat­tle with reg­u­la­tors, the cen­tral Penn­syl­va­nia health sys­tems ter­mi­nated their agree­ment.

“We firmly be­lieve the in­te­gra­tion of our two health sys­tems would have served the best in­ter­ests of pa­tients and the en­tire cen­tral Penn­syl­va­nia com­mu­nity,” the sys­tems said in a state­ment. “Where circumstances al­low and where it makes the most sense for our pa­tients, we will con­tinue to col­lab­o­rate in the future.”

Penn State and Pin­na­cleHealth ini­tially tri­umphed against fed­eral reg­u­la­tors’ con­cerns over the merger. In May, a Penn­syl­va­nia fed­eral judge re­jected the FTC’s case and said pa­tients wouldn’t be harmed by the pro­posed con­sol­i­da­tion. But then the 3rd Cir­cuit over­turned that anal­y­sis, find­ing in­sur­ers wouldn’t be able to cre­ate a com­pet­i­tive health plan for the Har­ris­burg mar­ket with­out Penn State-Pin­na­cleHealth providers in their net­works.

Penn State Her­shey Med­i­cal Cen­ter will still ex­plore op­por­tu­ni­ties to col­lab­o­rate.

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