Hospital Antitrust Judgment Submitted To Court For Review

Attorney General Spitzer today filed a proposed Final Consent Judgement with a U.S. District Court which if signed would bring a three-year antitrust investigation and lawsuit against two Poughkeepsie based hospitals to final resolution.

The State and the hospitals asked Senior U.S. District Judge William C. Conner to review the joint proposal to close the case.

If signed by the Judge, the Judgment would resolve a 1998 antitrust law suit challenging the interactions of St. Francis Hospital and Vassar Brothers Hospital in Poughkeepsie as illegal agreements between competitors to fix prices and allocate services.

The Proposed Consent Judgement comes after the Attorney General prevailed in his motion for summary judgment against the defendants earlier this year. The judge found that the hospitals were engaged in price-fixing and market allocation, both clear violations of the antitrust laws. The decision received national attention, demonstrated that so-called "virtual mergers" could violate the antitrust laws, and established a framework for analyzing these antitrust issues.

The Proposed Judgment contains a series of provisions to end the conduct that the State charged was illegal. The hospitals will separately negotiate rates with third parties and will separately decide which hospital services to provide. The hospitals will seek to dissolve Mid-Hudson Health -- the entity through which many of the challenged activities occurred.

"Competition will bring more choices, higher quality, and lower prices to the people of Poughkeepsie," Spitzer said.

The Attorney General also expressed gratification that the hospitals joined in seeking entry of the Final Consent Judgment.

The case was handled by Robert Hubbard and Harry First in the Attorney General's Antitrust Bureau.

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