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NorthShore ends 16-year hospital acquisition battle with $55 million all-cash payment

by John R. Fischer, Senior Reporter | January 22, 2024
Business Affairs
Edward Hospital, part of Endeavor Health (Photo courtesy of Endeavor Health)
After more than a decade of going back and forth in court, NorthShore University HealthSystem, in Illinois, has agreed to pay $55 million in all cash to settle a consumer federal class action lawsuit that accused its acquisition of Highland Park Hospital, in Chicago, in 2000 of being anticompetitive.

Filed by patients in August 2007, the suit accused NorthShore, which rebranded just last month as Endeavor Health, of inflating inpatient and outpatient hospital prices and abusing its market power. The decision to file came after the Federal Trade Commission affirmed a 2005 ruling that said the deal was anticompetitive and violated federal antitrust law, according to Reuters.

NorthShore, known in 2000 as Evanston Northwestern Healthcare, acquired Highland Park and established an organization with $1.7 billion in assets, reported the Chicago Tribune at the time. In 2004, the FTC filed a case against the deal, alleging that NorthShore hiked inpatient and outpatient prices for services following the deal. An administrative law judge sided with the FTC in 2005, and the commission issued a remedy two years later that required, among other things, for ENH to establish separate, independent negotiating teams for both inpatient and outpatient services at Evanston and Highland Park.

The plaintiffs filed their separate lawsuit to seek damages from NorthShore for allegedly overcharging them. Their lawyers said they would also seek about $18.3 million for legal fees from the settlement fund.

“The settlement is the result of 16 years of very contested litigation and extensive arm’s-length negotiations,” plaintiffs’ attorney Marvin Miller told U.S. District Judge Edmond Chang, according to court documents.

NorthShore continues to deny any wrongdoing and did not admit liability when agreeing to the payment. In a statement, Endeavor Health said that resolving the matter “allows us to continue focusing on providing exceptional care."

Following its merger with Edward-Elmhurst Health in 2022, NorthShore became the third-largest health system in Illinois. Today, under the Endeavor Health brand, it has more than 7,100 physicians who serve over 4.2 million residents, including more than 1.3 million in the Chicagoland area. As of September, its operational revenue was $8.2 million.

Endeavor Health is made up of NorthShore hospitals, including Evanston and Highland Park Hospitals; Swedish Hospital; Northwest Community Hospital; and Edward-Elmhurst Health facilities.

The settlement is subject to court approval.

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