Bryan Cohen Nov. 21, 2012, 4:56pm

HARRISBURG, Pa. (Legal Newsline) - Pennsylvania Attorney General Linda Kelly and the Federal Trade Commission announced on Wednesday that they would challenge a proposed merger between two Reading area healthcare providers.

Reading Health System announced in May that it would acquire Surgical Institute of Reading L.P., a smaller competitor that performs particular inpatient and outpatient surgeries. Kelly alleges that the sale would reduce competition and hurt consumers in the process.

"The proposed acquisition would result in substantially higher prices for many kinds of medical procedures," Kelly said. "It would be bad not just for patients but also for employers in the Reading area."

RHS has a staff of 970 doctors, more than $1 billion in investments and cash, and owns and operates Reading Hospital. SIR has consistently charged 30 to 40 percent less than Reading Hospital for many medical procedures with good or better outcomes. Kelly said that St. Joseph Medical Center is the only other significant healthcare competitor in the market, besides SIR and Reading Hospital.

On Wednesday, FTC commissioners voted 5-0 to oppose the acquisition. On Monday, Kelly's office will request that a federal judge place a temporary injunction to prevent the sale.

Kelly says that the sale would potentially raise costs, lower quality care and allow RHS to raise rates further on commercial health plans.

"In the complaint, you'll see that RHS was already offering discounts to people who would 'cut out' their competition," Kelly said. "This issue is of vital importance to all of us. Healthcare is so expensive. Differences of 20 or 30 or 40 percent can add up to thousands and thousands of dollars."

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