Antitrust concerns about hospital mergers have historically focused on mergers of hospitals that compete for patients in the same local market.

Recently, the Federal Trade Commission (FTC) has been considering other legal theories under which to challenge mergers. In addition to focusing on labor markets and related monopsony effects, the FTC has also shown interest in “cross-market” effects on prices. The cross-market theory suggests that mergers between hospitals that are not in the same local patient market—i.e., mergers of hospitals that do not compete for the same set of patients—can result in price increases in certain limited circumstances.  

One of the criteria for a cross-market case is that the hospitals share “common customers,” which would allegedly allow the hospitals to gain bargaining leverage in their negotiations with those customers. Common customers include plan sponsors such as employers or labor unions whose members use the services of two hospitals. This is distinct from an in-market merger because the specific members who use one system rarely use the other. Instead, one set of the plan sponsor’s members uses one hospital system, and a distinct set of the sponsor’s members uses the other. In most cases, the fraction of common customers between two given systems will decrease as they are farther apart. To date, the cross-market hospital merger theory is untested in courts.

* * *

For additional information about the issues discussed above, or if you have any other antitrust concerns, please contact the Epstein Becker Green attorney who regularly handles your legal matters, or one of the authors of this Antitrust Byte:

E. John Steren
Member of the Firm
Patricia Wagner
General Counsel / Chief Privacy Officer
Jeremy Morris
Member of the Firm
Jump to Page

Privacy Preference Center

When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.

Strictly Necessary Cookies

These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.

Performance Cookies

These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.