February 20, 2015
Healthcare providers frequently consolidate to cut costs and improve patient care. These benefits can result from sharing administrative costs such as billing and electronic recordkeeping, eliminating excess capacity, better coordinating care, and making investments in new facilities and services that may have been unaffordable before the transaction.

But what if a merger improves patient care while also creating market power that may lead to higher prices? How (if at all) should courts balance better outcomes for patients against higher prices to insurers? In the recent Saint Alphonsus Medical Center-Nampa Inc. v. St. Luke's Health System Ltd. decision, the Ninth Circuit answered that no such balancing is allowed. If a merger creates market power that may lead to higher prices, it violates antitrust law regardless of its benefits to patients.

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