ALAMEDA COUNTY: Summit, Alta Bates Merger Could Face Challenge
The proposed merger of Summit Medical Center and Sutter Health-owned Alta Bates Medical Center could be "stymied by a challenge in federal court," the Alameda Times-Star reports. The deal needs approval from the state attorney general's office and the Federal Trade Commission to proceed, and "there are indications that both agencies will at least investigate the outcome" of the merger. The state attorney general's office has "already started examining the situation," the Times-Star reports. "We are looking at the central East Bay market and the announced acquisition by Sutter Health of Summit and the (attached Alta Bates merger)," said Deputy Attorney General John Donhoff. "I wouldn't call it an investigation; I would call it an inquiry," he added. "At issue," the Times-Star reports, "is whether the acquisition of Summit will put the nonprofit Sutter Health into a position of 'market power.'" Summit President and CEO Irwin Hansen said, "We believe that we cannot raise prices or lower quality without having the market react to it." But regulators say the deal has "the potential to lessen consumer choice." The potential for market dominance becomes "even more dramatic" when Kaiser Permanente's plan to shut down its Oakland hospital in June is factored into the equation, the Times- Star reports. "That closure will shift all of Kaiser's Oakland in-patients to" either Alta Bates or Summit -- all Sutter hospitals if the merger goes through. Kaiser's closure "would give Sutter control over 49% of Alameda County's licensed beds, and 51% of all in-patient days." With those kinds of numbers, FTC investigator John Weigand said, "It's likely that your merger will be challenged and your merger will be blocked." However, the Times-Star reports that investigators are still in the "process of deciding which geographic area and which product" -- in-patient care, primary care or specialty care -- "to examine" (Kagan, 12/16).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.