How should the Court of Appeals decide where the geographic market lies?
Poplar Bluff is a city of 17,000 people in southeastern Missouri. Sikeston and Cape Girardeau, Missouri, both towns with populations of over 40,000, are 40 and 60 miles away from Poplar Bluff. Tenet Healthcare owns Lucy Lee Hospital in Poplar Bluff and proposed to buy Doctors’ Regional Medical Center, also in Poplar Bluff. Both hospitals are profitable, but both are underutilized and have had trouble attracting specialists. The Federal Trade Commission filed suit to block the acquisition. The key question involved definition of the geographic market. The FTC proposed a relevant geographic market that essentially matched the service area: a 50-mile radius of downtown Poplar Bluff. Ninety percent of the two hospitals’ patients come from that area. Four other hospitals are in that area. The merged hospital would have 84 percent of the patients in that geographic market. Tenet argues that the geographic market should encompass a 65-mile radius from downtown Poplar Bluff. That area includes 16 hospitals. How should the Court of Appeals decide where the geographic market lies? See FTC v. Tenet Health Care Corp., 186 F.3d 1045 (8th Cir. 1999).
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