Cascade Health Solutions v. PeaceHealth

Cascade Health Solutions (f/k/a McKenzie) (Cascade) (plaintiff) and PeaceHealth (defendant) were the only two hospital-care providers in Lane County, Oregon. Hospitals provide varying levels of care. Primary and secondary acute care include common services like setting broken bones, and tertiary care refers to more complex services like intensive neonatal care. Cascade operated one hospital providing primary and secondary acute care. PeaceHealth operated three hospitals providing tertiary care in addition to primary and secondary acute care. PeaceHealth held a 75 percent share of the primary and secondary acute-care market and over 90 percent share of the tertiary-care market. PeaceHealth offered insurance companies price bundling discounts if they agreed to make PeaceHealth their exclusive preferred provider for all levels of care. Cascade sued, alleging a violation of Sherman Act § 2 and claiming that PeaceHealth’s price bundling practice constituted attempted monopolization. Cascade argued that it could sell its primary and secondary acute care services at a lower price than PeaceHealth. However, because PeaceHealth’s price bundle included tertiary care, a product Cascade did not offer, PeaceHealth’s bundle could unfairly exclude Cascade from the market by charging a lower price across all its services than Cascade could across its smaller service offering. Cascade’s attempted monopolization claims won at trial and PeaceHealth appealed.