Back to square one.

Byline: The Register-Guard

A federal appeals court panel has essentially told PeaceHealth and McKenzie-Willamette Medical Center to start over in their long-running antitrust battle. The dismal prospect of more years of bitter litigation should be a strong incentive for both parties to reach a settlement.

The only people cheering after Tuesday's ruling are the lawyers. A panel of the 9th U.S. Circuit Court of Appeals tossed out a jury's decision that PeaceHealth must pay $16.2 million in damages, plus $1.6 million in attorneys' fees and other expenses, to McKenzie-Willamette for anti-competitive practices. So PeaceHealth is off the hook. But the panel also reversed the lower court's ruling that prevented a different type of allegation against PeaceHealth from going to trial. So the door is open for McKenzie-Willamette to score another victory.

Actually, the door is open to just about anything. In their 58-page ruling, the appeals court judges made it clear that many of the matters in dispute in the antitrust case are close calls. U.S. District Judge Ancer Haggerty is a capable jurist, but on appeal his key findings were vacated and remanded for further proceedings. The results of such proceedings would be unpredictable - all that is certain is that they would be tedious and costly. The other option, to appeal further up the judicial ladder, would spare both parties a second jury trial, but otherwise is no more attractive.

More important, the conditions of competition have changed since 2002, when McKenzie-Willamette went to court accusing PeaceHealth of antitrust violations. At the time, McKenzie-Willamette was an independent community-owned medical center fighting to maintain its minority share of Lane County's market for hospital services - David against PeaceHealth's Goliath. Now it's owned by the biggest for-profit hospital corporation in the country, Community Health Systems Inc. of Tennessee. The health care giant undoubtedly recognizes that in a second jury trial, the David and Goliath casting would be reversed.

In addition, neither McKenzie-Willamette nor its corporate parent is directly involved in the antitrust lawsuit - the jury awarded the $16.2 million plus expenses to Cascade Health Solutions, a local non-profit group that retains 20 percent ownership of McKenzie-Willamette Medical Center. Community Health Systems may see little reason to continue supporting its partner in a legal battle whose prize, if any, would not be shared.

Indeed, as the filing date of the original lawsuit recedes, members of a jury might wonder what the case is all about. The worst abuses PeaceHealth was accused of committing have ended. McKenzie-Willamette's core complaint was that the bigger hospital used its wider array of medical services to obtain exclusive contracts with health insurers. Since the trial, the two biggest insurers - Regence BlueCross BlueShield of Oregon and Providence Health Plans - have contracted with McKenzie-Willamette for hospital services. If PeaceHealth was in fact trying to freeze McKenzie-Willamette out of the market, the best piece of evidence for such a charge has begun to melt away.

Both medical centers have new leaders since the lawsuit was filed. Both are building or hope to build new hospitals. It's time for new legal strategies as well - ones that lead to the negotiating table rather than the courtroom.