The Federal Trade Commission filed a complaint Tuesday against Evanston Northwestern Healthcare, which runs Evanston Hospital, accusing the corporation of illegally instituting price increases following a merger, according to an FTC press release.
But ENH Vice President for Corporate Affairs David Loveland said “our prices are highly competitive” and that the corporation vowed to fight the injunction “all the way.”
The FTC asserts that following the January 2000 merger with Highland Park Hospital, ENH became “a more significant” provider for residents in the northeast Cook County and southeast Lake County regions and used that status to increase prices.
“ENH’s acquisition of Highland Park Hospital resulted in significantly higher prices charged to health insurers and therefore in higher costs to purchasers of insurance and consumers of hospital services,” the press release states. “The FTC seeks a remedy to restore competition to the benefit of consumers seeking competitively priced health care.”
But according to Loveland, the price hike following the merger was merely a “one-time catch-up” that brought ENH prices closer to other health care providers. The merger has brought unprecedented benefits to patients, he said.
More than $100 million have been pumped into improvements for Highland Park Hospital, such as a state-of-the-art emergency room and cancer center.
“We think the FTC has ignored the overwhelming proof of the enormous benefits of the merger,” Loveland said. “What they did is in total disregard for the health and welfare of the families that we serve.”
In addition, the FTC complaint alleges that ENH Medical Group, the organization of doctors at ENH, engaged in illegal price fixing. Following the merger the Highland Park Independent Physician Group was absorbed into ENH Medical Group.
However, the ENH group negotiated prices for “several hundred” independent physicians who were not employed by the ENH group but were previously affiliated with Highland Park Hospital.
“The alleged conduct constitutes illegal price fixing among competing physicians or physician groups,” the FTC states in its press release. “(It) denies commercial payers, employers and individuals the benefits of competition in physician services.”
Loveland accused the FTC of doing an about-face and said big insurance companies have been negotiating with independent groups of doctors, such as the ENH organization, for the past decade.
But with a changing marketplace and the decline of the HMO business, insurance companies are seeking to dismantle the independent bargaining power of the doctors associations.
