A federal appeals court in San Francisco has upheld a lower court ruling that allowed the merger of Alta Bates and Summit medical centers.
Summit Medical Center in Oakland was acquired last year by Sutter Health, the parent company of Alta Bates Medical Center in Berkeley. The merger was completed immediately in December after U.S. District Judge Maxine Chesney denied an injunction sought by state Attorney General Bill Lockyer.
The 9th U.S. Circuit Court of Appeals upheld Chesney’s ruling Tuesday, saying she had used the proper legal standard and had not made “clearly erroneous” factual findings.
The court said it defers to judges’ decisions on injunctions unless they are clearly mistaken on the facts or the law that governs the case. The 3-0 ruling was issued by Judges Alex Kozinski, Pamela Rymer and Raymond Fisher.
Lockyer spokeswoman Sandra Michioku told the Daily Planet that the office was “reviewing our options.” She declined to discuss what those options might be or to offer any further comment on Tuesday’s ruling.
If no further appeals are filed, the case will return to Chesney for a final ruling on the legality of the merger.
“We’re extremely pleased that this decision has been reached,” Irwin Hansen, president and CEO of the merged hospitals, said in a statement. “We can now devote all our resources and energy into doing what we do best, providing care to our patients.”
The new entity is governed by a local 23-member board of directors. Medical, surgical, critical care, birthing, and 24-hour emergency services continue to be provided in Berkeley and Oakland, hospital officials noted in their statement.
Sacramento-based Sutter Health, which owns Alta Bates and 25 other hospitals in California, contended the East Bay hospitals could thrive only by combining and eliminating duplicate costs.
The two hospitals reported $19.1 million in total losses in the last fiscal year. Summit also reported a $100 million debt and said it could not survive on its own.
But Lockyer’s office said Chesney disregarded evidence that the combined hospitals would dominate the market in the area accessible to Oakland and Berkeley residents and gain the power to raise health care prices.
Chesney “missed the real-world result of primary importance to a patient with medical needs, a busy physician making rounds, or a family member visiting a loved one, that it is almost always quicker and easier – substantially so – for someone in the inner East Bay to go to a hospital inside the market than to one outside the market,” Deputy Attorney General John Donhoff said in papers filed with the appeals court.