ALTA BATES: State to Block Merger with Antitrust Suit
In the first official challenge to a merger between urban hospitals in California, a trial began yesterday in San Francisco on the proposed deal between Oakland's Summit Medical Center and Berkeley's Alta Bates Medical Center. The San Francisco Chronicle reports that State Attorney General Bill Lockyer asked a federal judge to block the merger on the grounds that the two rivals' combined 48% share of the East Bay market would allow them to raise prices 5% to 10% or more after the merger. The state argued that Summit could have continued to compete with Sutter Health-owned Alta Bates by merging with another chain such as Tenet Healthcare, which expressed interest in buying Summit in March 1998. But Summit's attorney said that the merger was the only way for Summit to avoid laying off 200 employees by the end of the year because of financial difficulties. The state also presented evidence that most insurers in the East Bay market oppose the merger. The trial is scheduled to end Thursday, and attorneys expect the judge's decision before Thanksgiving (Abate, 10/26).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.