A blow to PeaceHealth.

Byline: The Register-Guard

A jury verdict finding a violation of antitrust laws is intended to benefit the public. The violator is found guilty of unlawfully restraining competition, and the ensuing punishment deters such conduct in the future - ensuring the lower prices and improved services that a free marketplace is supposed to deliver. Yet there's little reason to be confident that this will be the result of McKenzie-Willamette Hospital's antitrust victory over PeaceHealth.

A federal court jury ruled Friday that PeaceHealth had attempted to monopolize the health-care market, engaged in price discrimination and interfered in McKenzie-Willamette's business. The jury ordered PeaceHealth to pay McKenzie-Willamette $5.4 million in damages, plus attorneys' fees. With the tripling of damages that automatically occurs in these cases, the verdict is in the $20 million range.

The jury also found that PeaceHealth had violated state law, and awarded $14.6 million in economic and punitive damages. The punitive damages carry a sting, because they express the jury's opinion that PeaceHealth had set out to harm McKenzie-Willamette at the community's expense. McKenzie-Willamette must choose between the state and federal awards, and though no decision has been made, the larger award under federal law looks like the rational choice.

This verdict, however, can't be celebrated as a victory over a would-be monopolist. For one thing, the legal fight isn't over. PeaceHealth plans to ask U.S. District Judge Ancer Haggerty to set aside the jury's decision. It's not known whether Haggerty will order PeaceHealth to alter its business practices. Whatever Haggerty decides, appeals are all but inevitable.

Moreover, PeaceHealth doesn't fit the image of a lawbreaker caught red-handed. The jury rejected three of McKenzie-Willamette's claims under federal law, finding that PeaceHealth had not monopolized the health-care market, had not participated in a conspiracy and had not engaged in exclusive deals. The jury decided the PeaceHealth had tried to monopolize the market but had not succeeded - and if that's the case, it's not clear that McKenzie-Willamette proved its central allegation: That its financial troubles can be laid at PeaceHealth's feet.

McKenzie-Willamette charged that PeaceHealth used its superior size to pressure health insurers to sign exclusive contracts, steering business away from the smaller hospital. McKenzie-Willamette also claimed that PeaceHealth's hospitals in Florence and Cottage Grove were the tentacles of an octopus, funneling patients to Sacred Heart Medical Center in Eugene. This behavior, McKenzie-Willamette argued, drove it to the brink of bankruptcy.

But instead of going bankrupt, McKenzie-Willamette has merged with Triad Hospitals Inc., one of the nation's largest private hospital companies. Triad, unable to know the result of the antitrust case, judged McKenzie-Willamette to be financially viable in competition with PeaceHealth. Indeed, the company has started changing some of the staffing and compensation practices that PeaceHealth argued were the real cause of McKenzie-Willamette's recent losses.

Maureen Weathers, chairwoman of McKenzie-Willamette's board of directors, said the verdict resulted from PeaceHealth's "unbridled pride." Weathers' perception rings true: PeaceHealth was the dominant hospital, and acted the part. Jurors may be unschooled in the intricacies of antitrust law, but they can recognize the underdog. It's possible that the jury's sympathies would have flowed in the other direction if PeaceHealth's courtroom opponent had been Triad instead of McKenzie-Willamette.

McKenzie-Willamette has won an important victory, and its decision to proceed all the way to trial with its antitrust suit has been vindicated. It's reassuring to hear that any damages McKenzie-Willamette eventually collects will go into the hospital's local foundation, not to Triad headquarters in Texas.

PeaceHealth, for its part, was so sure of its defense that it preferred to go to trial in hopes of clearing its reputation. Agreeing to a pre-trial settlement would have implied some admission of guilt. Now, PeaceHealth has lost the gamble, and the damage won't be repaired even if it wins on appeal. Any future reversal will be regarded by some as having come on a technicality, with the jury's conclusion representing a common-sense judgment.

More wrangling lies ahead. At this point, the only sure winners are the lawyers.