Issue link: https://beckershealthcare.uberflip.com/i/633033
48 FINANCE NorthShore CEO: FTC Gerrymandered to Oppose System Merger By Ayla Ellison E vanston, Ill.-based NorthShore University HealthSystem CEO Mark Neaman has accused the Federal Trade Com- mission of gerrymandering, claiming the agency is only analyzing a small portion of the Chicago area's healthcare mar- ket to challenge NorthShore's merger with Downer's Grove, Ill.- based Advocate Health Care, according to the Chicago Tribune. In December, the FTC authorized action to block the planned NorthShore-Advocate merger, and the Illinois At- torney General joined the FTC in the matter. e deal was subsequently halted when both hospital chains and the FTC agreed to a temporary restraining order to stop the transaction. In an administrative complaint, the FTC claimed if North- Shore and Advocate combined they would operate a majority of the hospitals in the combined system's competitive geographic market, composed of northern Cook and southern Lake counties. However, Mr. Neaman claimed the FTC isn't looking at the full picture. In a meeting with the Tribune's editorial board, Mr. Neaman said the combined entity would compete with hospitals throughout Chicagoland, not just in northern Cook and southern Lake counties, and it would have 22 per- cent of inpatient beds in the six-county Chicago area market. Mr. Neaman also took issue with the FTC's exclusion of some very close competitors in its analysis. For instance, the agency did not include Presence St. Francis Hospital in Evan- ston in its analysis, even though the hospital is only a few miles from one of NorthShore's hospitals. "It seems kind of strange that you can gerrymander some- thing like this and think for a moment that somebody can't drive from north Evanston to south Evanston," Mr. Neaman told the Tribune's editorial board. "And yet, with all of their work to try to come up with this geography, which suits their purposes, they had to work really, really, really, really hard to get it to just over 50 percent." Although the antitrust battle could take months to re- solve, both Advocate and NorthShore have said they re- main committed to the deal and will fight the FTC's at- tempt to prevent the transaction, according to the report. n The Meaning in Aetna's Departure from AHIP By Erin Marshall A fter Aetna announced plans to leave America's Health Insurance Plans Jan. 5, sources have curiously evaluated the decision and its impacts. Created in 2003 due to a merger between the Health Insurance Asso- ciation of America and the American Association of Health Plans, AHIP is currently the health insurance indus- try's largest trade group. But the orga- nization has seen numerous problems in recent years, sources claim. Karen Ignagni, AHIP's CEO for 22 years, left the trade group in 2015, as did two other senior officials — Mary Beth Donahue, former executive vice president, and Dan Durham, former executive vice president for strategic initiatives and interim CEO. Aetna's exit from AHIP, combined with UnitedHealthcare's departure in June, leave AHIP without some needed member dues. AHIP earned $41.5 million in member dues in 2014, according to the report. Aetna paid approximately $1.1 million in dues each year, according to The Hill. The rapid departure of insurers from AHIP has left some analysts puz- zled. "With Aetna and [UnitedHealth- care] facing such tough regulatory scrutiny, it seems silly that they would abandon one of D.C.'s most powerful trade organizations. They are putting their brand at risk," an anonymous industry source told The Hill. According to The Hill's other sources, the AHIP's larger members have recently felt distanced from the trade group's leadership. Still others believe AHIP has noth- ing to fear. "AHIP is going to continue to speak for the industry, that's just what's going to happen," said Dan Mendelson, founder and CEO of Avalere Health and a former Clinton administration advisor. "Let's be real, when Sylvia Burwell wants to find out what the health insur- ance industry's position is on an issue, she's going to call Marilyn Tavenner. She's not going to call the CEO of any one member company," he added. n