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This section contains the nature of the case and procedural background.

Poplar Bluff is a city of 17,000 located in Butler County, which has a population of 40,000. Sikeston, Missouri, and Cape Girardeau, Missouri, both towns with populations of over 40,000 are forty and sixty miles away from Poplar Bluff. Poplar Bluff is within a few hours' drive of several large metropolitan centers including St. Louis, Missouri, Memphis, Tennessee, and Jonesboro, Arkansas. Tenet (D) owns Lucy Lee Hospital in Poplar Bluff. Lucy Lee is a general acute care hospital that provides primary and secondary care services. It operates ten outpatient clinics in the surrounding counties. Its average daily census was 75 in 1994, 76 in 1995, and 104 in 1996. Doctors' Regional Medical Center (D) in Poplar Bluff is presently owned by a group of physicians. It is also a general acute care hospital providing primary and secondary care services. It has 230 licensed beds, of which 187 are staffed. Its average census in 1994 was 106, in 1995 was 99, in 1996 was 95, and in 1997 was 77. It also operates several rural health clinics in the area. Though profitable, both hospitals are underutilized and have had problems attracting specialists to the area. Tenet (D) recently entered into an agreement to purchase Doctors' Regional (D) for over forty million dollars. Tenet (D) plans to operate it as a long-term care facility and to consolidate inpatient services at Lucy Lee. Tenet (D) plans to employ more specialists at the merged facility and to offer higher quality care in a comprehensive, integrated delivery system that would include some tertiary care. Pursuant to the Hart-Scott-Rodino Act, 15 U.S.C. § 18a, Ds filed a premerger certification with P. P filed a complaint alleging that the merger would lessen competition for primary and secondary inpatient hospitalization services in the area. The district court held a five-day hearing on P's motion for preliminary injunction. Lucy Lee and Doctors' Regional (D) are the only two hospitals in Poplar Bluff, other than a Veteran's Hospital. The combined service area of these hospitals covers eight counties and an approximate fifty-mile radius from Poplar Bluff. There are also several other hospitals in the surrounding area. Both Lucy Lee and Doctors' Regional (D) have entered into discount agreements with numerous managed care entities and employers. Market participants testified that they had negotiated substantial discounts and favorable per diem rates as a result of 'playing the two hospitals off each other.' They testified that if the merged entity were to raise its prices by ten percent, the health plans would have no choice but to simply pay the increased price. Ds obtain ninety percent of their patients from zip codes within a fifty-mile radius of Poplar Bluff. In eleven of the top twelve zip codes, however, significant patient admissions--ranging from 22% to 70%--were to hospitals other than those in Poplar Bluff. There is no dispute that Poplar Bluff residents travel to St. Louis, Memphis, and Jonesboro for tertiary care. The evidence also shows, however, that significant numbers of patients in the Poplar Bluff service area travel to other towns for primary and secondary treatment that is also available in Poplar Bluff. P’s expert testified that the merger would be anticompetitive. Ds' expert concluded that the proposed merger would not harm competition. He concluded that if the merged hospital were to raise prices, enough patients would leave the merged hospital and seek care at an alternative hospital to render the price increase unprofitable. P presented the testimony of Alan Bruce Steinwald. He opined that patients seeking care outside Poplar Bluff were seeking a more sophisticated level of service than that available in Poplar Bluff. Steinwald conceded that some patients went to other hospitals for services that were available in Poplar Bluff but was unable to quantify those patients. The district court enjoined the merger. It found that the statistical evidence presented in the case failed to establish the relevant geographic market. Ds appealed.

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