A federal judge denied the Federal Trade Commission and Pennsylvania Office of Attorney General’s request for an injunction to prevent the merger of Penn State Milton S. Hershey Medical Center and PinnacleHealth System.
The FTC and Attorney General Kathleen Kane could withdraw or continue the legal challenge to the merger, but Penn State said in a release that the health care organizations will continue to lay the groundwork for their integration under Penn State Health.
The OAG joined the FTC’s complaint for a temporary restraining order and preliminary injunction, which was filed in December in federal court in Harrisburg to prevent the parties from merging. The complaint said a merger would likely lead to increased health care costs and reduced quality of care for about 500,000 residents and patients.
“We have learned the hard way in Pittsburgh what happens when a health system has a large market share,” Kane said in December. “The continued competition between Pinnacle and Hershey will ensure that the greater Harrisburg area will continue to have a vibrant and competitive health care market.”
In Pittsburgh, health care has become increasingly connected to another university. UPMC, the medical arm of Penn State’s fellow state-related university Pitt, has become the dominant provider.
The FTC issued an administrative complaint that alleged a Penn State-Pinnacle merger would create a dominant provider of general acute care inpatient hospital services sold to commercial health plans, effectively controlling 64 percent of the south-central Pennsylvania market.
Penn State Health said in a release that the merger would increase patient access to a wider range of services over a broader geographic base.
“Judge (John) Jones’ decision reinforces our long-stated position that the proposed integration of PinnacleHealth and the Milton S. Hershey Medical Center is to the benefit of patients, families, employers and our broader community,” Penn State Health CEO A. Craig Hillemeier said in a release. “We remain committed to our integration plans with a focus on the people and communities we serve, as well as the many dedicated people who deliver patient care, educate our next generation of care providers, and work to shape the future of medicine.”
Under the proposed structure, Hillemeier would serve as the CEO of the new organization, and PinnacleHealth President and CEO Michael Young would serve as the president and chief operating officer. The new organization would be governed by a 17-member board of directors made up of directors drawn from Penn State, Hershey Medical Center and PinnacleHealth System boards.