WHERE ART THOU, EFFICIENCIES? THE UNCERTAIN ROLE OF EFFICIENCIES IN MERGER REVIEW

By Kaley Fendall and David Maas¹

I. INTRODUCTION

The role of efficiencies in merger review remains unclear. This ongoing uncertainty is interesting given that antitrust has long been a bastion of law and economics. As Richard Posner put it some 40 years ago, "the application of economics to antitrust has never been particularly controversial among economists. Even among academic lawyers, the appropriateness of placing economics in the foreground of antitrust analysis has been generally accepted."² That has also been true when it comes to courts and enforcers analyzing the anticompetitive effects of a merger. But the answer is not as simple when it comes to assessing a merger’s procompetitive benefits, such as efficiencies. Courts and enforcers have been resistant to accepting efficiencies as a legitimate basis on which to allow an otherwise anticompetitive merger to proceed. This skepticism of efficiencies over the years has resulted in murky jurisprudence and makes it difficult to predict the appropriate weight (if any) that pro-consumer efficiencies are to be assigned in merger analysis.

Given the consensus that antitrust focuses on consumer welfare, it is not surprising that the calls have grown louder for clear recognition of the role that efficiencies play in merger analysis. The Department of Justice’s ("DOJ") Antitrust Division has noted for instance, that "the concepts of economic welfare and economic efficiency are closely related to one another. Economists say that an economy is operating at maximum efficiency when society is squeezing the greatest value—the highest level of welfare— out of its scarce resources."³ In other words, sound antitrust policy promotes allocating resources more efficiently. However, thanks in part to the Supreme Court’s FTC v. Procter & Gamble Co. decision in the 1960s that cast some doubt on the role of efficiencies in merger analysis,⁴ efficiencies have never found solid footing in antitrust jurisprudence.

Courts routinely are hostile to recognizing efficiencies. The circuit split that has developed about the role of efficiencies was the focal point of a cert petition filed with the Supreme Court earlier this year.⁵ Unfortunately, the petition was withdrawn and we are left with no more clarity on whether and to what extent efficiencies can support a transaction challenged in court. Despite the cold shoulder given to efficiencies by most courts, antitrust enforcers continue to assert they will credit efficiencies in a proper case. The Merger Guidelines issued by the Federal Trade Commission ("FTC") and the DOJ recognize efficiencies and the enforcers invite parties to present efficiencies in connection with merger review. The degree to which enforcers credit efficiencies, however, is shrouded in uncertainty because the vast majority of their publicly available positions are in contested merger proceedings where they tend to take a narrow and hostile view of efficiencies.

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Where does this leave parties considering a merger who believe they have a strong case to make that their transaction will result in cognizable efficiencies? They have limited practical guidance on how to present a winning efficiencies argument to the enforcers, and an uphill battle to convince a court to credit an efficiencies argument. The uncertainty is unfortunate because rapid changes in technology and significant advances in healthcare have opened the door to many potential efficiency enhancing transactions that could benefit consumers through new products and services, increased access, and improvements in quality.

II. THE QUESTIONABLE TREATMENT OF EFFICIENCIES BY THE COURTS: A REVIEW

The friendliest treatment of efficiencies by an appellate court in a healthcare case, came in the Eighth Circuit’s decision in FTC v. Tenet Healthcare Corp.⁶ The court of appeals reversed a decision blocking the merger of two hospitals in Poplar Bluff, Missouri. The court based its reversal on the FTC’s failure to prove Poplar Bluff was the relevant geographic market. But the court also stated that the district court erred when it failed to consider "evidence of enhanced efficiency in the context of the competitive effects of the merger."⁷ The appellate court saw this evidence as demonstrating that the merger would create a more efficient healthcare delivery system capable of providing more and better care in the area. Even if payers were reaping the benefit of a price war in a small corner of the healthcare market in southeastern Missouri, that benefit had to be balanced against improved quality of care that subscribers would see if the hospitals were to merge.⁸ While this decision seemed to portend the development of a more sophisticated framework for recognizing efficiencies, it achieved very little traction in later district and appellate court decisions.

Even where the FTC has not disputed that a merger will result in large-scale efficiencies, some of which would be passed on to consumers, courts have found that defendants’ claimed efficiencies are not substantial enough to rebut the FTC’s case. For instance, in FTC v. Cardinal Health, Inc., defendants asserted—and the FTC’s own expert agreed—that a merger between wholesaler distributors of prescription drugs would result in tremendous cost savings that would be passed on through to the consumer in the form of lower prices and improved services.⁹ But the court found the FTC also presented evidence to suggest that the efficiencies claimed by defendants were not "merger-specific," and that many of the "savings anticipated from the mergers could also be achieved through continued competition in the wholesale industry." Noting that the "critical question raised by the efficiencies defense is whether the projected savings from the mergers are enough to overcome the evidence that tends to show that possibly greater benefits can be achieved by the public through existing, continued competition," the court held that defendants did not meet this burden.¹⁰

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While the D.C. Circuit acknowledged in FTC v. H.J. Heinz Co. that "the trend among lower courts is to recognize the [efficiencies] defense," it also found that "the high market concentration levels present in this case require in rebuttal proof of extraordinary efficiencies, which the appellees failed to supply."¹¹ According to the court, "given the high concentration levels, the court must undertake a rigorous analysis of the kinds of efficiencies being urged by the parties in order to ensure that those ‘efficiencies’ represent more than mere speculation and promises about post-merger behavior."¹² Additionally, the court held that the "asserted efficiencies must be ‘merger-specific’ to be cognizable as a defense," and "cannot be achieved by either company alone."¹³ While the court ultimately found it did not need to decide whether defendants’ claimed efficiencies defense was sufficient (as it was reviewing the district court’s denial of preliminary injunctive relief), it at least recognized that efficiencies may be "sufficiently concrete" to offset a prima facie showing under Section 7.¹⁴

The Ninth Circuit has been similarly skeptical of the efficiencies. In Saint Alphonsus Medical Center v. St. Luke’s Health System,¹⁵ the Ninth Circuit found that a hospital-physician group merger violated the antitrust laws, stating that only "extraordinary efficiencies" that could not be achieved without the merger could even conceivably offset anticompetitive concerns. The Ninth Circuit’s rigorous and narrow view seemed to question whether efficiencies would ever justify a highly concentrative merger.¹⁶ Proponents of a meaningful efficiencies defense were not pleased.¹⁷ In the wake of St. Luke’s, the Third Circuit similarly rejected an efficiencies defense in a hospital merger case, questioning whether the defense "even exists."¹⁸

Most recently, in a decision blocking the proposed merger of two large national insurers—Anthem and Cigna—a panel of the D.C. Circuit walked back that court’s prior recognition of an efficiencies defense in FTC v. Heinz. With two of the four largest commercial health insurers merging, it was hard to dispute the merger’s anticompetitive effects. "[T]he centerpiece of [the parties’] defense [was the] contention that Anthem and Cigna national account customers will save a combined total of over $2 billion in medical expenditures because Cigna members will be able to access the more favorable discounts that Anthem has negotiated with its provider network."¹⁹ The district court rejected the argument, holding that "the claimed medical cost savings are not cognizable efficiencies since they are not merger-specific, they are not verifiable, and it is questionable whether they are ‘efficiencies’ at all."²⁰

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On appeal, Anthem didn’t take issue with the district court’s finding that the government had made a prima facie showing the merger was anticompetitive. It put all of its eggs in the efficiencies basket. In a split decision, the D.C. Circuit rejected Anthem’s argument. The majority cited FTC v. Procter & Gamble Co.²¹ for the proposition that efficiencies "cannot be used as a defense to illegality" because Congress "struck the balance in favor of protecting competition."²² The dissent highlighted the discord in modern antitrust regarding efficiencies and the questionable legacy of Procter & Gamble. Judge Kavanaugh stated that the Supreme Court’s decision in United States v. General Dynamics Corporation²³ marked the shift to modern antitrust analysis, which "focuses on the effects on the consumers of the product or service, not the effects on competitors."²⁴ Judge Kavanaugh asserted that in light of General Dynamics courts must "consider the efficiencies and consumer benefits of the merger."²⁵ This spirited dissent figured prominently in the petition for certiorari that Anthem filed with the Supreme Court.²⁶ Unfortunately, Anthem withdrew the petition before the Supreme Court could consider reentering the fray to provide clarity on the proper role of efficiencies in merger analysis.²⁷

III. THE AGENCIES’ "RECOGNITION" OF EFFICIENCIES

The Horizontal Merger Guidelines plainly state that the agencies will consider efficiencies. Section 10 of the Guidelines, entitled "Efficiencies," lays out in detail the agencies’ position on efficiencies. The agencies "will not challenge a merger if cognizable efficiencies are of a character and magnitude such that the merger is not likely to be anticompetitive in any relevant market."²⁸ The Guidelines highlight two major limitations on the kinds of efficiencies the enforcers will credit: (1) the efficiencies must be merger specific (i.e., not attainable independently or through another transaction without anticompetitive effects); and (2) the efficiencies must not be speculative.

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The Guidelines describe the merger specificity requirement as follows:

The Agencies credit only those efficiencies likely to be accomplished with the proposed merger and unlikely to be accomplished in the absence of either the proposed merger or another means having comparable anticompetitive effects. These are termed merger-specific efficiencies. Only alternatives that are practical in the business situation faced by the merging firms are considered in making this determination. The Agencies do not insist upon a less restrictive alternative that is merely theoretical.²⁹

The verifiability requirement is similarly laid out in plain terms:

Efficiencies are difficult to verify and quantify, in part because much of the information relating to efficiencies is uniquely in the possession of the merging firms. Moreover, efficiencies projected reasonably and in good faith by the merging firms may not be realized. Therefore, it is incumbent upon the merging firms to substantiate efficiency claims so that the Agencies can verify by reasonable means, the likelihood and magnitude of each asserted efficiency, how and when each would be achieved (and any costs of doing so), how each would enhance the merged firm’s ability and incentive to compete, and why each would be merger-specific. Efficiency claims will not be considered if they are vague, speculative, or otherwise cannot be verified by reasonable means. Projections of efficiencies may be viewed with skepticism, particularly when generated outside of the usual business planning process. By contrast, efficiency claims substantiated by analogous past experience are those most likely to be credited.³⁰

If we were to judge based on the Merger Guidelines alone, it might look as though efficiencies are firmly part of the merger review process. Many private practitioners see it otherwise. There is limited transparency when it comes to deals that the enforcers decide not to challenge, so the public rarely knows when an efficiencies argument succeeds in persuading an enforcement agency to allow an otherwise anticompetitive merger to proceed. When push comes to shove and the FTC or DOJ decides to challenge a proposed merger, they invariably take a narrow view of cognizable efficiencies.

For example, in 2011, the DOJ sought to enjoin H&R Block, which offered do-it-yourself tax return software, from acquiring a company with a similar product, Tax ACT.³¹ H&R Block asserted that the acquisition of Tax ACT would result in efficiencies and management improvements that would "lead to better, more effective, and/or cheaper H&R Block digital products post-merger" and that the merged company would better able to compete with Intuit (by far the largest seller of do-it-yourself tax return software).³² The Court acknowledged that a sufficient showing of efficiencies may rebut the government’s showing of likely anticompetitive effects, but noted that "[h]igh market concentration levels require ‘proof of extraordinary efficiencies,’ … and courts ‘generally have found inadequate proof of efficiencies to sustain a rebuttal of the government’s case.’"³³ The Court discounted evidence proffered by H&R Block demonstrating millions of dollars in annual efficiencies in ten different areas as a result of the acquisition and instead credited the government’s expert witness, who concluded that with one exception, "the proposed efficiencies identified by the defendants are either not merger-specific or not verifiable."³⁴ Most of the efficiencies, in the Court’s view, could be achieved independently, or those efficiencies that were merger-specific were not verifiable and based merely upon self-serving "management judgements" as to what would generate cost savings.³⁵ The Court granted the government’s motion and enjoined the acquisition.

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In the same year, the FTC opened a proceeding and filed a complaint to enjoin OSF Healthcare Systems’ acquisition of Rockford Health System. Both defendants were not-for-profit healthcare systems that operated hospitals.³⁶ Defendants challenged the injunction arguing that the acquisition would achieve a number of efficiencies, including: (1) annual, recurring cost savings based on the consolidation of clinical operations; (2) one-time capital avoidance savings; and (3) clinical effectiveness and best practices.³⁷ The FTC conversely asserted that such efficiencies were "speculative, unreliable, and not merger-specific."³⁸ The Court concluded that the healthcare systems’ efficiencies defense could ultimately prevail, but because its job was to preserve the status quo, it granted the government’s motion finding that "the FTC vigorously and cogently criticized this defense with expert testimony of its own."³⁹ OSF Healthcare System then abandoned the proposed transactions.

Recent hospital merger decisions have come to similar results, finding an inadequate showing of efficiencies by the parties.⁴⁰ These cases showcase the high burden of demonstrating non-speculative and merger-specific efficiencies that satisfy the enforcers and/or a court.

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In 1995, then FTC Commissioner Christine Varney stated that efficiencies justifications "should play a role in [the FTC’s] analysis" but only "as a matter of prosecutorial discretion."⁴¹ That certainly seems to be how both the enforcers and the courts have treated efficiencies: a dispensation available only from the enforcers, and at their discretion.

IV. A WINNING EFFICIENCIES ARGUMENT: WHAT WOULD IT LOOK LIKE?

Given that efficiencies have never won the day in court, practitioners and parties have to speculate about what a winning argument would be.

In healthcare mergers, there are often efficiencies that improve the quality of, or access to, care. For instance, when a hospital with excess volume merges with one that is underutilized (i.e., an average daily census with large numbers of empty beds), the result is a more efficient allocation of patients to beds in a way that improves access to and potentially also the quality of cared delivered in the area. The FTC has not given a clear roadmap for how to present a winning quality of care argument. For instance, the FTC is sometimes but not always receptive to quality of care experts used to support efficiencies:

Though quality of care experts may play an important role in hospital merger cases, their role generally is limited to reviewing the case-specific evidence and explaining its implications to the judge; testimony that hospital mergers (or some subset thereof) generally have a positive or negative impact on quality is suspect. Thus, just as with other defenses, quality-related claims in hospital merger matters often turn on ordinary course documents, executive testimony, and other case-specific evidence.⁴²

The FTC seems more interested in a quantitative approach to quality efficiencies. As then-Director of the Bureau of Competition Deborah Feinstein stated in June 2014, the FTC is interested in specific measurable evidence that supports quality improvement efficiencies:

In assessing quality arguments, we examine a variety of evidence. We look at the comparative quality of the hospitals merging. If the acquired hospital already has strong quality measurements comparable to those of the acquiring hospital, we may question the ability of the acquiring hospital to improve those metrics. If the acquiring hospital has made prior acquisitions, we will want to see whether those mergers resulted in quality improvements. The parties must explain more than just the processes and practices that the acquiring hospital system can transfer to an additional hospital; they need to address the specifics of how those processes and practices will benefit patients through improved care.⁴³

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This focus on quantifiable quality metrics has intuitive appeal. However, without a roadmap from the enforcers on which quality metrics parties should consider and how parties can balance these metrics against any competitive effects, quality improvement efficiencies remain especially elusive. Healthcare providers considering transactions with quality improvements in mind are faced with no reliable means of assessing the likely outcome of antitrust review. The expense of complying with a second request can be prohibitive in some transactions, and in any case averages around $4 million⁴⁴ Without a clearer sense of when and how efficiencies arguments can carry the day, some deals with strong pro-consumer efficiencies may die in pipeline.

V. WHAT ARE THE CONSEQUENCES OF NOT GIVING MORE WEIGHT TO EFFICIENCY CLAIMS?

We can’t identify the deals that don’t get off the ground because of the enforcers’ and courts’ restrictive approach to evaluating efficiencies. We can see the ebb and flow of contested mergers, which gives some sense of the kinds of deals that die despite efficiencies. Sometimes efficiencies are driven by large scale changes in industries. For instance, in 1995 former Commissioner Varney noted that efficiencies arguments for hospital mergers were "more facially plausible" because after a hospital construction boom in the 1960s, payers "put[] cost-containment pressures on hospitals, [which] … along with technological advances … shortened in-hospital treatment time and forced more outpatient based treatments, [leading] many hospitals [to] have excess capacity."⁴⁵ As we are seeing drastic changes in the way healthcare is delivered—more integrated value-based care, the introduction of machine learning and artificial intelligence, the rapid development of new medical technology—it seems that we are in or entering another era when efficiency arguments for provider mergers should be given more credit. But the opposite seems to be happening: courts and enforcers seem to be construing efficiencies with increasing skepticism.

One result of this skepticism of efficiencies may be more interest in "COPA" laws. (The acronym COPA is derived from a certificate of public advantage—an approval given to a transaction by a state authority that then operates under the state action doctrine to immunize the deal from antitrust condemnation). The FTC has filed highly critical comments in a number of recent COPA proceedings. For instance, when West Virginia enacted a COPA law and then granted a COPA to the merger of the only two hospitals in Huntington, West Virginia, the FTC loudly voiced its disapproval. The FTC stated that the law "would mainly serve to encourage mergers and conduct that likely would not pass muster under the antitrust laws."⁴⁶ The FTC eventually dismissed its administrative complaint challenging the merger but issued a strong statement admonishing politicians and providers to be wary of seeking a COPA to avoid traditional antitrust enforcement:

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Proponents of cooperative agreement laws claim that antitrust enforcement undermines the policy goals of the Affordable Care Act to improve quality and lower costs through greater coordination among healthcare providers. This is fundamentally incorrect. The ACA [Affordable Care Act] did not repeal the antitrust laws, and it certainly does not condone mergers that substantially lessen competition.⁴⁷

The FTC declared that "antitrust enforcement is consistent with—not an impediment to—the goals of the ACA."⁴⁸

When two large health systems in Tennessee and Virginia—Wellmont Health System and Mountains States Health Alliance—proposed merging, the Tennessee Department of Health sent a letter to the FTC requesting its participation in and comments on COPA proceedings regarding the merger.⁴⁹ The FTC submitted testimony and comments to both the Tennessee and Virginia Departments of Health in their respective COPA proceedings.⁵⁰ The FTC’s views throughout the proceedings have been clear: it feels the merger would create a "behemoth hospital system" with "tremendous market power" that would harm competition.⁵¹ The FTC took issue with the efficiencies the parties presented, claiming that they were speculative and not merger specific.⁵²

The FTC highlighted at a hearing before the Virginia health authority that it was "aware of no analysis comparing the impact this merger would have on residents of Southwest Virginia to other possible mergers or affiliations that likely are available."⁵³That common refrain from the FTC—couldn’t you achieve these efficiencies in a deal with someone else?—is understandable but disconnected from business realities. Parties considering a merger often engage consultants to assess options in the market. Once a transaction is in the pipeline the merging parties often engage economists to assess the potential competitive effects and efficiencies of the deal. As a practical matter, parties cannot feasibly have their consultants and economists assess the potential efficiencies of other potential counterparties whose data is not available (and who may not be interested in a merger). It’s easy for the enforcers to say there might be another deal out there that could achieve the same efficiencies. It is difficult for a party to prove the negative: that no such alternative exists. The same is true when the FTC suggests efficiencies could be achieved by some arrangement short of a merger: it is difficult for parties to prove the negative that they would not actually realize those efficiencies without the merger. Given the hostile reception accorded to efficiencies’ arguments at the FTC, it should not be surprising that when parties propose a transaction and seek to justify it by relying on efficiencies, they will consider seeking a COPA and cutting short the antitrust process.

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The FTC’s view on COPAs has been clear. The agency doesn’t like them. Curiously, on November 1, 2017, the FTC issued a staff notice seeking empirical research and public comments on COPAs.⁵⁴ Only time will tell whether the agency is genuinely open to reconsidering its views on COPAs, or is simply seeking ammunition for a renewed attack on them. But so long as parties believes that strong efficiencies arguments will usually founder at the FTC, and always perish in court, COPAs will continue to be popular.

VI. CONCLUSION

The federal enforcers seem to think efficiencies are adequately considered in merger analysis. If this is the end of the road for efficiencies, then they might as well be called the Hail Mary pass of healthcare mergers. It remains difficult for parties to get any traction with efficiencies that might justify an otherwise anticompetitive merger. Until there is more useful guidance from courts and enforcers on what a successful efficiencies argument looks like, parties will continue to push for alternatives, such as COPAs.

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Notes:

^1. Kaley Fendall is an associate in the Portland, Oregon office of Davis Wright Tremaine LLP and David Maas is an associate in the Seattle, Washington office of Davis Wright Tremaine LLP. They both specialize in antitrust and litigation. The authors gratefully acknowledge the guidance of Allison Davis and Douglas Ross, as well as the assistance of Kelly Gorton, in preparing this article..

^2. Richard J. Posner, The Economic Approach to Law, 53 Tex. L. Rev. 757, 758 (1975).

^3. Discussion Paper, Welfare Standards and Merger Analysis: Why not the Best?, Justice Dept. March 2006, available at https://www.justice.gov/atr/welfare-standards-and-merger-analysis-why-not-best.

^4. 386 U.S. 568 (1967).

^5. Petition for Certiorari, U.S. v. Anthem, 2017 WL 1832038 (2017).

^6. 186 F.3d 1045 (8th. Cir. 1999)

^7. FTC v. Tenet Healthcare Corp., 186 F.3d 1045 (8th. Cir. 1999)

^8. Id. at 1054.

^9. FTC v. Cardinal Health, Inc., et al., 12 F. Supp.2d 34 (D.D.C. 1998)

^10. Id. at 43-44.

^11. FTC v. H.J. Heinz Co., 246 F.3d 708, 720 (D.C. Cir. 2001) (emphasis added).

^12. Id.

^13. Id. at 721-22.

^14. Id. at 727.

^15. 778 F.3d 775 (9th Cir. Feb. 10, 2015).

^16. See Thomas L. Greaney and Douglas Ross, Navigating Through the Fog of Vertical Merger Law: A Guide to Counselling Hospital-Physician Consolidation Under the Clayton Act, 91. U. Wash. L. Rev. 199, 209 (Mar. 2016).

^17. See, e.g., Int’l Ctr. For Law & Econ, The Ninth Circuit Botched Its Efficiencies Analysis In The FTC v. St Luke’s Antitrust Case, available at http://laweconcenter.org/home/119-the-nmth-circuit-botched-its-emciencies-analysis-in-the-ftc-v-st-lukes-antitrust-case.html.

^18. FTC v. Penn State Hershey Medical Center, 838 F.3d 327, 348 (3d Cir. 2016).

^19. Anthem v. Cigna, 236 F.Supp.3d 171, 181 (D.D.C. Feb. 18, 2017).

^20. Id.

^21. 386 U.S. 568 (1967).

^22. U.S. v. Anthem, Inc., 855 F.3d 345, 353 (D.C. Cir. 2017).

^23. 415 U.S. 486 (1974).

^24. U.S. v. Anthem, Inc., 855 F.3d 345, 376 (D.C. Cir. 2017).

^25. Id.

^26. Petition for Certiorari, U.S. v. Anthem, Inc., available at http://sourceonhealthcare.org/wp-content/ uploads/2017/05/Anthem-Petition-for-Cert.pdf.

^27. See J. Gardner Amrsby, Anthem Terminates $54 Billion Cigna Merger after Delaware Chancery Court Denies Injunction, [Q: is this citation incomplete?]

^28. Horizontal Merger Guidelines §10.

^29. Id.

^30. Id.

^31. See United States v. H&R Block, Inc., 833 F. Supp. 2d 36, 42 (D.D.C. 2011).

^32. Id. at 80-81.

^33. Id. at 89 (emphasis added).

^34. Id. at 90.

^35. Id.

^36. FTC v. OSF Healthcare Sys., 852 F. Supp. 2d 1069, 1071 (N.D. Ill. 2012).

^37. Id. at 1089.

^38. Id.

^39. Id.

^40. See, e.g., FTC v. Penn State Hershey Med. Ctr., 838 F.3d 327, 350 (3d Cir. 2016); FTC v. Advocate Health Care, No. 15 C 11473, 2017 U.S. Dist. LEXIS 37707, at *1 (N.D. Ill. Mar. 16, 2017).

^41. Christine Varney, New Directions at the FTC: Efficiency Justifications in Hospital Mergers and Vertical Integration Concerns, available at https://www.ftc.gov/es/public-statements/1995/05/new-directions-ftc-efficiency-justifications-hospital-mergers-vertical.

^42. Jeffrey H. Perry & Richard H. Cunningham, Effective Defenses of Hospital Mergers in Concentrated Markets, Antitrust, Spring 2013 at 43.

^43. Deborah Feinstein, FTC Director of Competition, Speech at Fifth National Accountable Care Organization Summit, June 19, 2014.

^44. Peter Boberg & Andrew Dick, Findings from the Second Request Compliance Burden Survey, The Threshold, Sept. 2014, available at http://www.crai.com/publication/findings-second-request-compliance-burden-survey.

^45. See Christine Varney, New Directions at the FTC: Efficiency Justifications in Hospital Mergers and Vertical Integration Concerns, May 2, 1995.

^46. Letter from Marina Lao, Ginger Jin, and Markus H. Meier, to Del. Mike Pushkin (Mar. 9, 2016), available at www.ftc.gov/system/files/documents/advocacy documents/ftc-staff-comment-west-virginia-house-delegates-regarding-sb-597-competitive-implications-provisions/160310westvirginia. pdf#sthash.zATqMkLP.dpuf.

^47. Statement of FTC In re Cabell Huntington Hospital, Inc., FTC No. 9366, July 6, 2016, available at https://www.ftc.gov/system/files/documents/public statements/969783/160706cabellcommstmt.pdf.

^48. Id.

^49. See Letter from John J. Dreyzehner to FTC Secretary Donald S. Clark Requesting An Advisory Opinion Regarding the Effect of the Sale of A Merged Hospital Entity Operating Pursuant To A Certificate of Public Advantage, available at https://www.ftc.gov/public-statements/2015/12/ letter-alexis-gilman-assistant-director-mergers-iv-division-bureau.

^50. See FTC Submissions and Testimony on Wellmont Health System/Mountain States Health Alliance, available at https://www.ftc.gov/enforcement/cases-proceedings/151-0115/wellmont-healthmountain-states-health.

^51. See, e.g., FTC Staff Supplemental Submission to the Tennessee Department of Health Regarding the Certificate of Public Advantage Application of Mountain States Health Alliance and Wellmont Health System, Jan. 6. 2017, available at https://www.ftc.gov/system/files/documents/ advocacy documents/ftc-staff-supplemental-submission-tennessee-department-health-regarding-certificate-public-advantage/170105mshatennesseesuppcmt.pdf.

^52. See FTC Supplemental Public Comment in Virginia Opposing Health Systems’ Cooperative Agreement Application, Jan. 13, 2017, available at https://www.ftc.gov/system/files/documents/ cases/ftc staff supplemental submission to virginia 1-13-17.pdf.

^53. See Testimony of Mark Seidman, Deputy Assistant Director, Mergers IV Division, Before the Southwest Virginia Health Authority, available at https://www.ftc.gov/system/files/documents/ cases/161003mshatestimony.pdf.

^54. See Staff Letter, FTC Staff Seeks Empirical Research and Public Comments Regarding Impact of Certificates of Public Advantage, Nov. 1, 2017, available at https://www.ftc.gov/news-events/press-releases/2017/11/ftc-staff-seeks-empirical-research-public-comments-regarding.