Data analyst: "No way to spin merger to make it look better"

Written by Ben Allen, General Assignment Reporter | Apr 12, 2016 7:07 PM

(Harrisburg) -- An expert has testified a merger between Penn State Health and Pinnacle Health would likely means higher costs for consumers, lower quality care, and less innovation at the new health system.

Day two of a hearing in federal court was dominated by Nathan Wilson's testimony. He's an economist for the Federal Trade Commission, and says his close study of the proposed merger shows prices could rise at least 10 percent every year.

He says a Penn State Health executive knew how the merger appeared to look to regulators and apparently asked a data analyst to help.

But in an email, the Penn State Health data analyst said there's no way to spin the merger to make it look better.

Federal and state regulators are asking a federal judge to stop the merger between Penn State Health and Pinnacle.

Lawyers for the health systems have argued it would actually be positive, saying Penn State Hershey could avoid building a $277 million tower, saving money for consumers.

But Wilson testified a new tower would be a good thing - it would show competition is fierce.

Lawyers for Penn State Health and PinnacleHealth also say the merger would save the health systems money and the savings could be passed on to consumers.

They add that they compete with larger health systems like Johns Hopkins, which would keep quality up and push forward on innovation.

The hearing is expected to last the rest of the week, with a decision coming in a month and a half or so.

Inside the Chambers:

Unlike Monday, no kids in the courtroom today, and a much smaller crowd, but there were still some notable moments.

First, a cell phone rang in the chambers, and made it all the way until the third repeat of the ringtone. A ringing cell phone often gets you kicked out of a district court. But in the federal court, Judge John Jones III didn't say a word.

For the second time in two days, witness testimony was abruptly halted and lawyers from both sides met with Judge Jones. In open court, he would only say the discussion was over a "logistical issue". When it resumed, the witness was no longer in the chambers.

It also appears the judge took complete testimony from a witness in his chambers, instead of open court. There are a number of documents in the case that remain under seal as well.

One of the law firms working on the case for Penn State Health and PinnacleHealth is Jones Day. If that name rings a bell, here's why: Republican presidential candidate Donald Trump recently met with GOP leaders at the firm's Washington, D.C. office. The firm has also been helping Trump with legal work for his campaign.

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