EVANSTON, IL — Nearly 24 years after the owner of Evanston and Glenbrook hospitals acquired Highland Park Hospital and formed NorthShore University HealthSystem, a federal judge approved a $55 million settlement to resolve a class action lawsuit to resolve allegations the merger led to an abuse of market power and inflated prices.
The lawsuit over the merger was filed in August 2007 in the wake of rulings from an administrative law judge and the Federal Trade Commission that the merger was anticompetitive and violated federal antitrust law.
The FTC’s involvement required NorthShore to establish separate negotiating teams at both Evanston and Highland Park hospitals for inpatient and outpatient services.
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The class action suit was filed on behalf of patients of NorthShore, which in recent years has again rebranded itself — first as NorthShore – Edward-Elmhurst Health and then last month as Endeavor Health.
NorthShore’s new monikers follow its acquisition of Swedish Hospital in Chicago, Northwest Community Healthcare in Arlington Heights and Naperville-based Edward-Elmhurst Health. It is now the third-largest health system in Illinois.
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In 2008, a U.S. District Judge Joan Lefko denied NorthShore’s motion to dismiss the suit but sided with the hospital group in a 2010 opinion. She relied on an unreliable NorthShore witness to deny class action status to the plaintiffs, according a filing from their lead attorney.
But in 2012, Lefko’s order was reversed by the 7th Circuit Court of Appeals, the class was reinstated and the case was reassigned to Judge Edmond Chang, who granted class certification in 2013. The two sides traded motions for the next decade before Chang issued a February 2023 order allowing the suit to continue and setting the stage for a jury trial.
The $55 million settlement amount, which NorthShore has already deposited in an escrow account, will be distributed proportionally to the plaintiffs after deducting legal fees and other related costs.
Notably, patients who paid fixed co-pays, Medicare or Medicaid users, uninsured patients with unpaid bills, and anyone related to NorthShore employees are ineligible for compensation from the settlement.
Attorneys for the plaintiffs, led by Marvin Miller of Miller Law, took the case on a contingency fee basis, meaning they would have gotten nothing if they had lost.
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“Indeed, since this case’s inception in 2007, there were no obvious indications that a settlement was possible, or that the litigation would be successful,” Miller said in a court filing.
Miller and other attorneys for the plaintiffs in the class action antitrust litigation are seeking up to $18.3 million from the settlement fund for legal fees.
“While always at risk of not being compensated, Plaintiffs and Lead Counsel took on this complex litigation and committed considerable resources to achieve substantial benefits for the Class,” he said.
Despite the all-cash settlement — finalized on Dec. 13 ahead of a trial that had been scheduled for Jan. 9 — NorthShore maintains that it did nothing wrong and denies liability.
“The resolution of this matter allows us to continue focusing on providing exceptional care and a safe, seamless and personal experience for those we are privileged to serve,” Endeavor spokesperson Keith Hartenberger said in a statement.
The pending settlement agreement was first reported last week by Reuters Legal.
On Wednesday, Chang issued an order preliminarily approving the settlement and scheduling a fairness hearing for May 6.
Ahead of that hearing, attorneys for the class must publicly announce the agreement twice in national newswires by the end of next month and any members wishing to object must file paperwork with the court before the end of March.
Chang said the $55 million deal, which was “arrived at by arm’s-length negotiations by highly experienced counsel after formal and informal mediations and years of litigation, falls within the range of possibly approvable settlements.”
Related:
$35 Million Settlement In NorthShore, Sex Offender OB-GYN Birth Injury Suit
NorthShore To Pay $10.3M In Class Action Over COVID-19 Vaccine MandateNorthShore, Edward-Elmhurst Merger Receives Regulatory Approval
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