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This week, thirty-three of the most prominent economists in America with expertise in the subjects of antitrust, competition, and health economics, including Dr. Scheffler, filed an amicus brief with the Seventh Circuit of the US Court of Appeals regarding the case Federal Trade Commission v. Advocate Health Network. This case is an effort by the FTC to block the merger of Advocate Health Care Network and NorthShore University HealthSystem, two leading providers of general acute care inpatient hospital services in the North Shore area of Chicago, and is one of the FTC’s latest efforts in regulating hospital mergers. These efforts were blocked by a district court in June, with the FTC now appealing.
In the brief, the thirty-three economists state that the analysis and conclusions the district court used in this case was based upon faulty economic reasoning, particularly as it relates to geographic market definition. In the brief, they explain that the district court “relied upon outdated economic methodologies that have been thoroughly studied and discredited by academic economists as well as the courts over the past 10 to 15 years. Thus, the district court erred by using a repudiated economic approach and by failing to evaluate the FTC’s proposed relevant geographic market by an appropriate economic standard.” Therefore, the economists submit that the ruling should be reversed and the matter remanded so that the evidence can be evaluated under a proper economic standard.
The full brief can be read here.