SUMMIT-ALTA BATES: Lockyer Asks Court to Block Merger
Despite federal regulators' decision not to intervene in the merger of Summit Medical Center and Alta Bates Medical Center in Oakland, state Attorney General Bill Lockyer (D) yesterday asked a federal judge to temporarily halt the deal -- just one day before it was set to be "consummated." Lockyer said the merger would result in Sutter Health controlling nearly 50% of the market in the region and causing a "postmerger price increase of at least 5 to 10%, or a decrease in service quality to the same extent." He said, "Our job is to protect health services and businesses. Those services are at risk due to the over-concentration that would result from the merger." The San Francisco Chronicle reports that Lockyer's move "marks only the third time this decade that state authorities have attempted to block a hospital combination independent of federal antitrust officials." He said the FTC considered the merger in light of "a national scope," but the issue was of more immediate concern to antitrust officials in the state. "I don't know what the odds of success or failure are, but clearly we have a duty to be an active advocate for consumers," Lockyer said. Alameda County Supervisor Gail Steele applauded Lockyer's move, saying, "I've been against this from the start, because I think the merger would weaken the remaining county and independent hospitals." But Summit CEO Irwin Hansen said the attorney general's action puts at risk the financial stability of the two facilities. He said, "We believe the survival of Summit and Alta Bates are worth fighting for. We would like to avoid spending our limited resources on litigation, but we are prepared to follow that course if we have to." Both Lockyer and the hospitals said they will continue to pursue a solution through a settlement (Abate, 8/11).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.