New York court refuses to block merger of Long Island hospitals.

In October 1997, a New York court rejected an attempt by the U.S. Department of Justice (DOJ) to block the merger of two New York teaching hospitals. The DOJ's case was based, in part, on the premise that the consumers in the hospitals' market were managed care organizations, which needed prestigious teaching hospitals to "anchor" their healthcare delivery networks. In rejecting the DOJ's argument, the court found, in particular, that the merging hospitals were not sufficiently distinguishable from other area hospitals to constitute a separate product market of anchor hospitals and that the merging hospitals' faced competition for about 85 percent of their services. Moreover, the court recognized other significant consumers in the market. The decision may pave the way for metropolitan-area hospitals to pursue mergers.