NorthShore Hospital Settles for $55M

NorthShore Hospital Settles for $55M

Introduction

NorthShore University HealthSystem in Illinois has agreed to pay $55 million to settle a long-standing consumer class-action lawsuit in U.S. federal court, bringing an end to over a decade of litigation related to its 2000 merger with Highland Park Hospital, a suburban Chicago rival. The settlement follows extensive evidence collection and aggressive legal disputes over allegations by individuals who paid for NorthShore's services. The plaintiffs claimed that the hospital, now operating as Endeavor Health, abused its market power, allowing for inflated prices. The lawsuit, initiated in August 2007 and following a related Federal Trade Commission (FTC) action, accused NorthShore of antitrust violations. Endeavor Health, formerly NorthShore, reached a settlement in principle with the plaintiffs' attorneys in November, culminating in a $55 million all-cash settlement. The resolution, subject to court approval, comes after 16 years of contentious litigation. A trial, originally scheduled for January 9, was averted by the settlement. Endeavor Health, in a statement, emphasized Highland Park Hospital's vital role in the Chicago-area community and expressed relief that the resolution allows them to focus on providing exceptional care. Despite the settlement, NorthShore maintains its denial of any wrongdoing and does not admit liability. The plaintiffs sought damages for NorthShore consumers who allegedly faced overcharging for services. The lawsuit paralleled an FTC order in 2004, which found the NorthShore-Highland Park Hospital merger in violation of antitrust laws. The FTC resolution mandated the establishment of separate negotiating teams for inpatient and outpatient services at both Evanston and Highland Park. As part of the settlement, the plaintiffs' lawyers plan to seek approximately $18.3 million for legal fees from the settlement fund. The settlement, when approved, will bring closure to a protracted legal battle over the alleged anticompetitive practices stemming from NorthShore's merger with Highland Park Hospital.