OSF Healthcare prevails in suit brought by UnityPoint Health-Methodist

Oct. 01--PEORIA -- A federal judge concluded Friday that OSF Healthcare System did not illegally exclude UnityPoint Heath-Methodist from Peoria's health insurance market.

Rather, U.S. District Judge Sara Darrow found in her 36-page order there was "no legal basis for any antitrust violations."

"To the extent Methodist contends that St. Francis used threats and coercion to secure its exclusive contracts, the Court has already noted that the evidence does not show any such threats actually occurred, and if they did they would have been so remote that no executive could have afforded them credence," Darrow wrote in her order.

Debbie Simon, president and CEO of UnityPoint Health-Peoria, said the company was "disappointed."

"We are disappointed in the court's decision and are evaluating the details of the ruling. We remain committed to our mission of delivering outstanding healthcare and meeting the needs of the communities we serve," she said.

Reaction from OSF was positive.

"OSF HealthCare is pleased that the Court agreed with our position and found in favor of OSF on all claims. We look forward to continuing to serve our communities with the greatest care and love," noted Robert L. Brandfass, senior vice president and chief legal officer of OSF Healthcare System.

The antitrust lawsuit, filed three years ago in U.S. District Court, alleged OSF Healthcare System engaged in practices that limited competition, drove up costs and reduced quality and consumer choices. Furthermore, the suit claimed, Methodist, then known as Methodist Medical Center, was blocked by OSF, which used its sheer market size, then 52 percent, to act as a bully. If a commercial insurer were to mention contracting with Methodist or any other rivals, St. Francis threatened to withdraw from the insurer's network, the suit claimed.

Darrow said she found no evidence of that.

"The evidence does not show any threats of that kind. At most, it shows (Blue Cross Blue Shield) executives acknowledged that St. Francis' threat of withdrawal from their network may have been a negotiating tactic, but the possibility of St. Francis following through was either remote or nonexistent. Indeed, such a move would not have been rational for St. Francis, given BCBS's dominant position in the Peoria market," the judge wrote.

Her order granted a motion for summary judgement by OSF. Such a motion is a common occurrence in civil cases and usually involves one side telling the judge that there are not facts in dispute or that no jury could possibly rule against them.

Darrow also noted the move in 2010 by Caterpillar Inc., who dropped an 18-year exclusive deal with OSF and allowed its employees to use any of the four hospitals at the time. Proctor and Pekin hospitals have since merged with Methodist.

"When it wanted to move to a broader network, it did so, and paid for it. Accordingly, Methodist was never unlawfully foreclosed by St. Francis from competing for Caterpillar's business," the judge wrote.

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