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After a months-long analysis, Attorney General Wayne Stenehjem has joined the Federal Trade Commission in asking the federal district court to pause the merger of Sanford Bismarck and Mid Dakota Clinic until the FTC has completed an administrative hearing that will determine the legality of the transaction and any appropriate remedies.
Stenehjem recognizes that Sanford Health and Mid Dakota Clinic are the two largest providers of adult primary care physician services, pediatric services, OB GYN services, general surgery, and outpatient surgical services in the Bismarck-Mandan area. “Mid Dakota Clinic and Sanford Bismarck are highly respected medical entities in this region that separately offer a complementary and competitive full range of high quality medical services,” said Stenehjem. “I believe that maintaining consumer choice will best suit the needs of patients and consumers, as well as comporting with the laws regulating competition.”
Stenehjem noted that he is charged with enforcing North Dakota laws regarding anticompetitive practices. “I am concerned the proposed merger might eliminate the significant competition between Sanford and Mid Dakota Clinic, and that the possible results could be lack of choice and higher prices,” Stenehjem said. “It is my inherent responsibility as Attorney General to review proposed mergers and to carefully scrutinize any proposed transactions that could result in an unlawful reduction in competition.”
Stenehjem stated that he is not, in any way, suggesting any improper motives for the merger and is joining the FTC’s request that the federal district court put the merger on hold subject to a later and more thorough administrative proceeding. “It would be practically impossible to undo this merger if it moves forward and there is a later full determination that it is prohibited,” said Stenehjem.
Parrell Grossman, director of the Attorney General’s Consumer Protection and Antitrust Division, noted concerns about the high concentration of a post-merger physician services market. “As a combined entity, Sanford and Mid Dakota Clinic would have an 86-98% share of each of the primary care, pediatrics, OB GYN, and general surgery services market,” Grossman said.
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