                 FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


SAINT ALPHONSUS MEDICAL                No. 14-35173
CENTER - NAMPA INC.; SAINT
ALPHONSUS HEALTH SYSTEM                   D.C. Nos.
INC.; SAINT ALPHONSUS                1:12-cv-00560-BLW
REGIONAL MEDICAL CENTER,             1:13-cv-00116-BLW
INC.; TREASURE VALLEY
HOSPITAL LIMITED
PARTNERSHIP; FEDERAL TRADE               OPINION
COMMISSION; STATE OF IDAHO,
             Plaintiffs-Appellees,

               and

IDAHO STATESMAN PUBLISHING,
LLC; THE ASSOCIATED PRESS;
IDAHO PRESS CLUB; IDAHO
PRESS-TRIBUNE LLC; LEE
PUBLICATIONS INC.,
                   Intervenors,

                v.

ST. LUKE’S HEALTH SYSTEM,
LTD.; ST. LUKE’S REGIONAL
MEDICAL CENTER, LTD.;
SALTZER MEDICAL GROUP,
          Defendants-Appellants.
2   ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

      Appeal from the United States District Court
                for the District of Idaho
    B. Lynn Winmill, Chief District Judge, Presiding

               Argued and Submitted
         November 19, 2014—Portland, Oregon

                Filed February 10, 2015

     Before: Richard R. Clifton, Milan D. Smith, Jr.,
        and Andrew D. Hurwitz, Circuit Judges.

               Opinion by Judge Hurwitz
     ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.                3

                           SUMMARY*


                            Clayton Act

    The panel affirmed the district court’s judgment in favor
of the Federal Trade Commission, the State of Idaho, and two
local hospitals, holding that the 2012 merger of two health
care providers in Nampa, Idaho, violated § 7 of the Clayton
Act.

    Section 7 of the Clayton Act bars mergers whose effect
“may be substantially to lessen competition, or to tend to
create a monopoly.” The plaintiff must first establish a prima
facie case that a merger is anticompetitive, and the burden
then shifts to the defendant to rebut the prima facie case.

    The panel held that the district court did not clearly err in
determining that Nampa, Idaho, was the relevant geographic
market. The panel also held that the district court did not
clearly err in its factual findings that the plaintiffs established
a prima facie case that the merger will probably lead to
anticompetitive effects in that market. The panel further held
that a defendant can rebut a prima facie case with evidence
that the proposed merger will create a more efficient
combined entity and thus increase competition. The panel
held that the district court did not clearly err in concluding
that the defendant did not rebut the plaintiffs’ prima facie
case where the defendant did not demonstrate that efficiencies
resulting from the merger would have a positive effect on



  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4   ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

competition. Finally, the panel held that the district court did
not abuse its discretion in choosing a divestiture remedy.


                         COUNSEL

Brian K. Julian, Anderson, Julian & Hull LLP, Boise, Idaho,
for Defendant-Appellant Saltzer Medical Group.

J. Walter Sinclair, Brian C. Wonderlich, Holland & Hart LLP,
Boise, Idaho; Jack R. Bierig (argued), Scott D. Stein, Charles
K. Schafer, Ben Keith, Tacy F. Flint, Sidley Austin LLP,
Chicago, Illinois, for Defendants-Appellants St. Luke’s
Health System, Ltd. and St. Luke’s Regional Medical Center,
Ltd.

Keely E. Duke, Duke Scanlan Hall PLLC, Boise, Idaho;
David A. Ettinger (argued), Honigman Miller Schwartz &
Cohn LLP, Detroit, Michigan, for Plaintiffs-Appellees Saint
Alphonsus Medical Center-Nampa Inc.; Saint Alphonsus
Health System Inc.; Saint Alphonsus Regional Medical
Center, Inc.

Raymond D. Powers, Portia L. Rauer, Powers Tolman Farley,
PLLC, Boise, Idaho, for Plaintiff-Appellee Treasure Valley
Hospital Limited Partnership.

Lawrence G. Wasden, Attorney General, Brett T. DeLange,
Deputy Attorney General, Deborah L. Feinstein, Director,
Bureau of Competition, J. Thomas Greene, Peter C. Herrick,
Henry C. Su, Boise, Idaho; Jonathan E. Nuechterlein, General
Counsel, David C. Shonka, Principal Deputy General
Counsel, Joel Marcus (argued), Washington, D.C., for
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.   5

Plaintiffs-Appellees The Federal Trade Commission and The
State of Idaho.

Barbara D.A. Eyman, Eyman Associates, PC, Washington,
D.C., for Amicus Curiae America’s Essential Hospitals.

Lynn S. Carman, Natallia Mazina, Medicaid Defense Fund,
San Anselmo, California, for Amici Curiae International
Center of Law & Economics and Medicaid Defense Fund.

Joe R. Whatley, Jr., Edith M. Kallas, Whatley Kallas, LLP,
New York, New York, for Amici Curiae Economics
Professors.

Donald M. Falk, Mayer Brown LLP, Palo Alto, California;
Robert E. Bloch, Michael B. Kimberly, Mayer Brown LLP,
Washington, D.C., for Amicus Curiae The Association of
Independent Doctors.

Joseph M. Miller, Michael S. Spector, America’s Health
Insurance Plans; Pierre H. Bergeron, Mark J. Botti, Squire
Patton Boggs (US) LLP, Washington, D.C., for Amicus
Curiae America’s Health Insurance Plans.

Bruce L. Simon, Pearson, Simon & Warshaw, LLP, San
Francisco, California; Alexander R. Safyan, Pearson, Simon
& Warshaw, LLP, Sherman Oaks, California, for Amicus
Curiae Catalyst for Payment Reform.

Kamala D. Harris, Attorney General of California, Mark
Breckler, Chief Assistant Attorney General, Kathleen E.
Foote, Senior Assistant Attorney General, Emilio Varanini,
Deputy Attorney General, San Francisco, California; Robert
W. Ferguson, Attorney General of Washington, Darwin P.
6   ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

Roberts, Deputy Attorney General, Jonathan A. Mark, Chief,
Antitrust Division, Stephen T. Fairchild, Assistant Attorney
General, Seattle, Washington; Kathleen G. Kane, Attorney
General of Pennsylvania, James A. Donahue, III, Executive
Deputy Attorney General, Tracy W. Wertz, Chief Deputy
Attorney General, Jennifer A. Thomson, Senior Deputy
Attorney General, Harrisburg, Pennsylvania; George Jepsen,
Attorney General of Connecticut, Hartford, Connecticut;
Joseph R. Biden III, Attorney General of Delaware,
Wilmington, Delaware; Lisa Madigan, Attorney General of
Illinois, Carolyn E. Shapiro, Solicitor General, Chicago,
Illinois; Thomas J. Miller, Attorney General of Iowa, Des
Moines, Iowa; Jack Conway, Attorney General of Kentucky,
Frankfort, Kentucky; Janet T. Mills, Attorney General of
Maine, Augusta, Maine; Douglas F. Gansler, Attorney
General of Maryland, William F. Brockman, Deputy Solicitor
General, Baltimore, Maryland; Jim Hood, Attorney General
of Mississippi, Jackson, Mississippi; Tim Fox, Attorney
General of Montana, Helena, Montana; Catherine Cortez
Masto, Attorney General of Nevada, Carson City, Nevada;
Gary K. King, Attorney General of New Mexico, Santa Fe,
New Mexico; Ellen F. Rosenblum, Attorney General of
Oregon, Salem, Oregon; Robert E. Cooper, Jr., Attorney
General of Tennessee, Nashville, Tennessee, for Amicus
Curiae The States of California, Washington, Pennsylvania,
Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine,
Maryland, Mississippi, Montana, Nevada, New Mexico,
Oregon, and Tennessee.
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.          7

                          OPINION

HURWITZ, Circuit Judge:

    This case arises out of the 2012 merger of two health care
providers in Nampa, Idaho. The Federal Trade Commission
(“FTC”) and the State of Idaho sued, alleging that the merger
violated § 7 of the Clayton Act, 15 U.S.C. § 18, and state law;
two local hospitals filed a similar complaint. Although the
district court believed that the merger was intended to
improve patient outcomes and might well do so, the judge
nonetheless found that the merger violated § 7 and ordered
divestiture.

    As the district court recognized, the job before us is not to
determine the optimal future shape of the country’s health
care system, but instead to determine whether this particular
merger violates the Clayton Act. In light of the careful
factual findings by the able district judge, we affirm the
judgment below.

                       I. Background

A. The Health Care Market in Nampa, Idaho

    Nampa, the second-largest city in Idaho, is some twenty
miles west of Boise and has a population of approximately
85,000. Before the merger at issue, St. Luke’s Health
Systems, Ltd. (“St. Luke’s”), an Idaho-based, not-for-profit
health care system, operated an emergency clinic in the city.
Saltzer Medical Group, P.A. (“Saltzer”), the largest
independent multi-specialty physician group in Idaho, had
thirty-four physicians practicing at its offices in Nampa. The
only hospital in Nampa was operated by Saint Alphonsus
8       ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

Health System, Inc. (“Saint Alphonsus”), a part of the
multistate Trinity Health system. Saint Alphonsus and
Treasure Valley Hospital Limited Partnership (“TVH”)
jointly operated an outpatient surgery center.1

    The largest adult primary care physician (“PCP”) provider
in the Nampa market was Saltzer, which had sixteen PCPs.2
St. Luke’s had eight PCPs and Saint Alphonsus nine. Several
other PCPs had solo or small practices.

B. The Challenged Acquisition

    Saltzer had long had the goal of moving toward integrated
patient care and risk-based reimbursement.              After
unsuccessfully attempting several informal affiliations,
including one with St. Luke’s, Saltzer sought a formal
partnership with a large health care system.

     In 2012, St. Luke’s acquired Saltzer’s assets and entered
into a five-year professional service agreement (“PSA”) with
the Saltzer physicians (the “merger” or the “acquisition”).3
Saltzer received a $9 million payment for goodwill. The
initial PSA contained hortatory language about the parties’


  1
    For simplicity, this opinion sometimes refers to St. Luke’s and Saltzer
collectively as “St. Luke’s,” and Saint Alphonsus and TVH collectively
as the “Private Hospitals.”
    2
   The district court found that “[a]dult PCP services include physician
services provided to commercially insured patients aged 18 and over by
physicians practicing internal medicine, family practice, and general
practice.”
  3
    The parties and the district court regarded the PSA as the functional
equivalent of an employment agreement, and we assume the same.
        ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.                 9

desire to move away from fee-for-service reimbursement, but
included no provisions implementing that goal. An amended
PSA, however, contained some quality-based incentives. The
merger did not require Saltzer doctors to refer patients to the
St. Luke’s Boise hospital, nor did it require that Saltzer
physicians use St. Luke’s facilities for ancillary services.

C. Procedural History

    In November 2012, the Private Hospitals filed a
complaint in the District of Idaho seeking to enjoin the
merger under Clayton Act § 7.4 The complaint alleged
anticompetitive effects in the relevant markets for “primary
care physician services,” “general acute-care inpatient
services,” “general pediatric physician services,” and
“outpatient surgery services.” The district court denied a
preliminary injunction, noting that: (1) the PSA did not
require referrals to St. Luke’s, minimizing any immediate
harm to the Private Hospitals; (2) implementation of the PSA
was to take place over time; and (3) the PSA provided a
process for unwinding the transaction if it were declared
illegal.

    In March 2013, the FTC and the State of Idaho filed a
complaint in the district court seeking to enjoin the merger
pursuant to the Federal Trade Commission Act (“FTC Act”),
the Clayton Act, and Idaho law.5 This complaint alleged


 4
      The Private Hospitals filed an amended complaint in January 2013.
  5
    The Idaho Competition Act is “construed in harmony” with federal
antitrust law, Idaho Code §§ 48-102(3), -106, and the district court held
that the antitrust analysis is the same for each. The parties do not contend
otherwise.
10 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

anticompetitive effects only in the adult PCP market. The
district court consolidated this case with the one filed by the
Private Hospitals, and after a nineteen-day bench trial, found
the merger prohibited by the Clayton Act and the Idaho
Competition Act because of its anticompetitive effects on the
Nampa adult PCP market.6

    The district court expressly noted the troubled state of the
U.S. health care system, found that St. Luke’s and Saltzer
genuinely intended to move toward a better health care
system, and expressed its belief that the merger would
“improve patient outcomes” if left intact. Nonetheless, the
court found that the “huge market share” of the post-merger
entity “creates a substantial risk of anticompetitive price
increases” in the Nampa adult PCP market. Rejecting an
argument by St. Luke’s that anticipated post-merger
efficiencies excused the potential anticompetitive price
effects, the district court ordered divestiture. This appeal
followed.

                     II. Standard of Review

     We review the district court’s findings of fact for clear
error and its conclusions of law de novo. Husain v. Olympic
Airways, 316 F.3d 829, 835 (9th Cir. 2002), aff’d, 540 U.S.
644 (2004). The question is whether a finding of fact is
“clearly erroneous,” not whether there is a “compelling case”
for an alternative finding. California v. Am. Stores Co.,
872 F.2d 837, 842 (9th Cir. 1989), rev’d on other grounds,
495 U.S. 271 (1990). The district court’s choice of remedy
is reviewed for abuse of discretion. Theme Promotions, Inc.

 6
   The court therefore did not address the Private Hospitals’ contentions
with respect to the other product markets.
       ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 11

v. News Am. Mktg. FSI, 546 F.3d 991, 1000 (9th Cir. 2008)
(citing United States v. Alisal Water Corp., 431 F.3d 643, 654
(9th Cir. 2005)).

               III. The Clayton Act § 7 Analysis

A. Overview of the Clayton Act

    The great Yankee catcher Yogi Berra is reputed (likely
apocryphally) to have said that it’s “tough to make
predictions, especially about the future.” The Perils of
Prediction, Economist, June 2, 2007, at 96.7 Yet that is
precisely what this case requires. Because § 7 of the Clayton
Act bars mergers whose effect “may be substantially to lessen
competition, or to tend to create a monopoly,” 15 U.S.C.
§ 18, judicial analysis necessarily focuses on “probabilities,
not certainties,” Brown Shoe Co. v. United States, 370 U.S.
294, 323 (1962). This “requires not merely an appraisal of
the immediate impact of the merger upon competition, but a
prediction of its impact upon competitive conditions in the
future; this is what is meant when it is said that the amended
§ 7 was intended to arrest anticompetitive tendencies in their
incipiency.” United States v. Phila. Nat’l Bank, 374 U.S.
321, 362 (1963) (internal quotation marks omitted).

    Section 7 claims are typically assessed under a “burden-
shifting framework.” Chi. Bridge & Iron Co. v. FTC,
534 F.3d 410, 423 (5th Cir. 2008). The plaintiff must first


   7
      This quotation is not included in the definitive book of Berra
quotations, see Yogi Berra, The Yogi Book: “I Really Didn’t Say
Everything I Said!” (1998), and its provenance is at best unclear, see, e.g.,
The Yale Book of Quotations 92 (Fred R. Shapiro ed., 2006) (attributing
a variant to Niels Bohr, but noting that the exact authorship is disputed).
12 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

establish a prima facie case that a merger is anticompetitive.
See Olin Corp. v. FTC, 986 F.2d 1295, 1305 (9th Cir. 1993)
(discussing how plaintiff’s establishment of a prima facie
case on statistical evidence was the first step in the analysis).
The burden then shifts to the defendant to rebut the prima
facie case. See id.; Am. Stores, 872 F.2d at 842 (citing United
States v. Marine Bancorporation, Inc., 418 U.S. 602, 631
(1974)). “[I]f the [defendant] successfully rebuts the prima
facie case, the burden of production shifts back to the
Government and merges with the ultimate burden of
persuasion, which is incumbent on the Government at all
times.” Chi. Bridge & Iron, 534 F.3d at 423.8

B. The Relevant Market

    “Determination of the relevant product and geographic
markets is a necessary predicate to deciding whether a merger
contravenes the Clayton Act.” Marine Bancorporation,
418 U.S. at 618 (internal quotation marks omitted).
Definition of the relevant market is a factual question
“dependent upon the special characteristics of the industry
involved and we will not disturb such findings unless clearly
erroneous.” Twin City Sportservice, Inc. v. Charles O. Finley
& Co., 676 F.2d 1291, 1299 (9th Cir. 1982). Although the


  8
    The application of this framework in the Ninth Circuit is not rigid.
Thus, in determining whether the prima facie case has been rebutted, a
district court may consider evidence submitted by the plaintiff in the case-
in-chief. See Olin, 986 F.3d at 1305 (finding no burden-shifting error
because the FTC had determined that the rebuttal evidence was
insufficient to overcome the prima facie showing); see also Chi. Bridge
& Iron, 534 F.3d at 424–25 (stating that Olin “allows [a court] to preserve
the prima facie presumption if the [defendant] . . . fails to satisfy the
burden of production in light of contrary evidence in the prima facie
case”).
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 13

parties agree that the relevant product market in this case is
adult PCPs, St. Luke’s vigorously disputes the district court’s
determination that Nampa is the relevant geographic market.
We find no clear error in that factual finding.

    The relevant geographic market is the “area of effective
competition where buyers can turn for alternate sources of
supply.” Morgan, Strand, Wheeler & Biggs v. Radiology,
Ltd., 924 F.2d 1484, 1490 (9th Cir. 1991) (alteration omitted)
(quoting Oltz v. St. Peter’s Cmty. Hosp., 861 F.2d 1440, 1446
(9th Cir. 1988)) (internal quotation marks omitted). Put
differently, “a market is the group of sellers or producers who
have the actual or potential ability to deprive each other of
significant levels of business.” Rebel Oil Co. v. Atl. Richfield
Co., 51 F.3d 1421, 1434 (9th Cir. 1995) (quoting Thurman
Indus., Inc. v. Pay ‘N Pak Stores, Inc., 875 F.2d 1369, 1374
(9th Cir. 1989)) (internal quotation marks omitted). The
plaintiff has the burden of establishing the relevant
geographic market. See United States v. Conn. Nat’l Bank,
418 U.S. 656, 669–70 (1974).

    A common method to determine the relevant geographic
market, and the one used by the district court, is to find
whether a hypothetical monopolist could impose a “small but
significant nontransitory increase in price” (“SSNIP”) in the
proposed market. See Theme Promotions, 546 F.3d at 1002;
see also In re Se. Milk Antitrust Litig., 739 F.3d 262, 277–78
(6th Cir. 2014) (describing the relevant geographic market as
one in which “buyers . . . respond to a SSNIP by purchasing
regardless of the increase”); U.S. Dep’t of Justice & FTC,
Horizontal Merger Guidelines (“Merger Guidelines”) § 4
14 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

(2010).9 If enough consumers would respond to a SSNIP by
purchasing the product from outside the proposed geographic
market, making the SSNIP unprofitable, the proposed market
definition is too narrow. See Theme Promotions, 546 F.3d at
1002.

    Market definition thus perforce focuses on the anticipated
behavior of buyers and sellers. See, e.g., Rebel Oil, 51 F.3d
at 1430, 1434–35. In the health care industry, insurance
companies effectively act both as buyers and sellers. See
FTC v. Freeman Hosp., 69 F.3d 260, 270 n.14 (8th Cir.
1995); Gregory Vistnes, Hospitals, Mergers, and Two-Stage
Competition, 67 Antitrust L.J. 671, 672 (2000). Noting that
“the vast majority of health care consumers are not direct
purchasers of health care—the consumers purchase health
insurance and the insurance companies negotiate directly with
the providers,” the district court correctly focused on the
“likely response of insurers to a hypothetical demand by all
the PCPs in a particular market for a [SSNIP].”10

  The district court found that a hypothetical Nampa PCP
monopolist could profitably impose a SSNIP on insurers.


 9
   Although the Merger Guidelines are “not binding on the courts,” Olin,
986 F.2d at 1300, they “are often used as persuasive authority,” Chi.
Bridge & Iron, 534 F.3d at 431 n.11.
  10
      This “two-stage model” of health care competition is “the accepted
model.” John J. Miles, 1 Health Care & Antitrust L. § 1:5 (2014). In the
first stage, providers compete for inclusion in insurance plans. See
Vistnes, supra, at 674. In the second stage, providers seek to attract
patients enrolled in the plans. See id. at 681–82. Because patients are
“largely insensitive” to price, the second stage “takes place primarily over
non-price dimensions.” Id. at 682. Thus, antitrust analysis focuses on the
first stage. Id. at 692.
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 15

Citing testimony that Nampa residents “strongly prefer access
to local PCPs,” the court found that “commercial health plans
need to include Nampa PCPs in their networks to offer a
competitive product.” “Given this dynamic—that health
plans must offer Nampa Adult PCP services to Nampa
residents to effectively compete—Nampa PCPs could band
together and successfully demand a [SSNIP] (or
reimbursement increase) from health plans.”

    St. Luke’s argues that the district court erred by
considering only the current behavior of Nampa consumers,
not their likely response to a SSNIP. St. Luke’s is of course
correct that geographic market definition involves
prospective analysis—it predicts consumer response to a
hypothetical price increase. See FTC v. Tenet Health Care
Corp., 186 F.3d 1045, 1053–54 (8th Cir. 1999). But that is
precisely what the district court did. The court not only
examined present Nampa consumer behavior, but also
concluded that it would not change in the event of a SSNIP.

    This determination was supported by the record.
Evidence was presented that insurers generally need local
PCPs to market a health care plan, and that this is true in
particular in the Nampa market. For example, Blue Cross of
Idaho has PCPs in every zip code in which it has customers,
and the executive director of the Idaho Physicians Network
testified that it could not market a health care network in
Nampa that did not include Nampa PCPs. Evidence also
indicated that consumers would not change their behavior in
the event of a SSNIP. Experts testified that because health
care consumers only pay a small percentage of health care
costs out of pocket, the impact of a SSNIP likely would not
register. Similarly, there was testimony that consumers
choose physicians on factors other than price. The court was
16 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

unconvinced by evidence that insurers could defend against
a SSNIP by steering consumers to non-Nampa PCPs.11

    For similar reasons, there also was no clear error in the
district court’s determination that evidence that one-third of
Nampa residents travel to Boise for PCPs did not prove that
a significant number of other residents would so travel in the
event of a SSNIP. Those who traveled generally went to
PCPs near their Boise places of employment. Thus, the court
reasonably found this statistic not determinative of whether
other Nampa residents would be willing to travel.

C. The Plaintiffs’ Case

    Once the relevant geographic market is determined, a
prima facie case is established if the plaintiff proves that the
merger will probably lead to anticompetitive effects in that
market. See Olin, 986 F.2d at 1305; see also Chi. Bridge &
Iron, 534 F.3d at 423. A prima facie case can be established
simply by showing high market share. United States v. Syufy
Enters., 903 F.2d 659, 664 n.6 (9th Cir. 1990); see also FTC
v. H.J. Heinz Co., 246 F.3d 708, 716 (D.C. Cir. 2001).
However, “statistics concerning market share and
concentration, while of great significance, [a]re not


 11
    Extensive evidence was offered about Micron, a Boise employer that
created a health care plan including financial incentives for employees to
use certain providers; the plan caused a substantial portion of Micron
employees residing in Nampa to switch to non-Nampa PCPs. St. Luke’s
argues that this evidence proved that Nampa consumers would respond to
a SSNIP. But the district court did not clearly err in finding the Micron
example unpersuasive. Micron’s cost differentials were much higher than
a SSNIP, Boise PCPs were close to work for Micron’s employees, and it
was unclear whether other employers would be willing or able to replicate
Micron’s program.
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 17

conclusive indicators of anticompetitive effects . . . .” United
States v. Gen. Dynamics Corp., 415 U.S. 486, 498 (1974); see
also FTC v. Warner Commc’ns Inc., 742 F.2d 1156, 1163 n.1
(9th Cir. 1984). Thus, plaintiffs in § 7 cases generally present
other evidence as part of the prima facie case. See Gen.
Dynamics, 415 U.S. at 498 (“[O]nly a further examination of
the particular market—its structure, history and probable
future—can provide the appropriate setting for judging the
probable anticompetitive effect of the merger.” (quoting
Brown Shoe, 370 U.S. at 322 n.38)); see also Chi. Bridge &
Iron, 534 F.3d at 431 (noting that market share data was “just
one element in the Government’s strong prima facie case”);
Carl Shapiro, The 2010 Horizontal Merger Guidelines: From
Hedgehog to Fox in Forty Years, 77 Antitrust L.J. 49, 50–60
(2010) (noting the trend in merger enforcement to consider
factors in addition to market share).

    The district court held that the plaintiffs established a
prima facie case because of the post-merger entity’s:
(1) market share; (2) ability to negotiate higher PCP
reimbursement rates with insurers; and (3) ability to “charge
more [ancillary] services at the higher hospital billing rates.”
The court also found that “entry into the market has been very
difficult and would not be timely to counteract the
anticompetitive effects of the Acquisition.” St. Luke’s does
not challenge the barriers-to-entry finding; we review the
others in turn for clear error.

   1. Market Share

    A commonly used metric for determining market share is
the Herfindahl-Hirschman Index (“HHI”). See ProMedica
Health Sys., Inc. v. FTC, 749 F.3d 559, 568 (6th Cir. 2014);
H.J. Heinz, 246 F.3d at 716. HHI is “calculated by summing
18 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

the squares of the individual firms’ market shares,” which
“gives proportionately greater weight to the larger market
shares.” Merger Guidelines § 5.3. The analysis “consider[s]
both the post-merger level of the HHI and the increase in the
HHI resulting from the merger.” Id. The Merger Guidelines
classify markets as (1) unconcentrated (HHI below 1500);
(2) moderately concentrated (HHI between 1500 and 2500);
or (3) highly concentrated (HHI above 2500). Id. Mergers
that increase the HHI more than 200 points and result in
highly concentrated markets are “presumed to be likely to
enhance market power.” Id. “Sufficiently large HHI figures
establish the FTC’s prima facie case that a merger is anti-
competitive.” H.J. Heinz, 246 F.3d at 716.

    The district court calculated the post-merger HHI in the
Nampa PCP market as 6,219, and the increase as 1,607. St.
Luke’s does not challenge these findings. As the district
court correctly noted, these HHI numbers “are well above the
thresholds for a presumptively anticompetitive merger (more
than double and seven times their respective thresholds,
respectively).” See ProMedica, 749 F.3d at 568 (noting that
a merger with similar HHI numbers “blew through those
barriers in spectacular fashion”).

   2. PCP Reimbursements

    The district court also found that St. Luke’s would likely
use its post-merger power to negotiate higher reimbursement
rates from insurers for PCP services. Recognizing that the
§ 7 inquiry is based on a prediction of future actions, see
Phila. Nat’l Bank, 374 U.S. at 362, this finding was not
clearly erroneous.
        ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 19

    Because St. Luke’s and Saltzer had been each other’s
closest substitutes in Nampa, the district court found the
acquisition limited the ability of insurers to negotiate with the
merged entity. Pre-acquisition internal correspondence
indicated that the merged companies would use this increased
bargaining power to raise prices. An email between St.
Luke’s executives discussed “pressur[ing] payors for new
directed agreements,” and an exchange between Saltzer
executives stated that “[i]f our negotiations w/ Luke’s go to
fruition,” then “the clout of the entire network” could be used
to negotiate favorable terms with insurers. The court also
examined a previous acquisition by St. Luke’s in Twin Falls,
Idaho, and found that St. Luke’s used its leverage in that
instance to force insurers to “concede to their pricing
proposal.”

    3. Ancillary Services

    The district court’s finding that St. Luke’s would raise
prices in the hospital-based ancillary services market12 is
more problematic. The court found that St. Luke’s would
“exercise its enhanced bargaining leverage from the
Acquisition to charge more services at the higher hospital-
based billing rates.” Because insurers and providers typically
negotiate for all services as part of the same contract, the
district court found that St. Luke’s increased leverage with



   12
       Ancillary services, such as x-rays and diagnostic testing, are
sometimes performed by doctors in conjunction with PCP examinations.
Before the merger, Saltzer provided many ancillary services at its
physicians’ offices. Insurance companies and Medicare often offer higher
reimbursements for ancillary services performed at a hospital-based
outpatient facility.
20 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

respect to PCP services would allow it to demand higher fees
for ancillary services.

    The problem with this conclusion is that the district court
made no findings about St. Luke’s’ market power in the
ancillary services market. Absent such a finding, it is
difficult to conclude that the merged entity could easily
demand anticompetitive prices for such services. Perhaps the
court was suggesting that St. Luke’s would engage in tying,
“a device used by a seller with market power in one product
market to extend its market power to a distinct product
market.” Cascade Health Solutions v. PeaceHealth, 515 F.3d
883, 912 (9th Cir. 2008). Although various antitrust statutes,
including Sherman Act §§ 1 and 2, Clayton Act § 3, and FTC
Act § 5, address tying, Clayton Act § 7 does not expressly
prohibit the practice. A leading antitrust treatise cautions
against condemning a merger for potential tying effects as
“superfluous and overdeterrent.” Phillip Areeda & Herbert
Hovenkamp, Antitrust Law: An Analysis of Antitrust
Principles and Their Application (“Areeda”) ¶ 1144a (2010).

    Wholly aside from these conceptual difficulties, the
factual underpinnings of the district court’s conclusion are
suspect. The documents cited by the district court merely
state that St. Luke’s hopes to increase revenue from ancillary
services, not that it plans to charge higher prices. An increase
in revenue could occur in a variety of ways not involving
increased prices, such as increased Medicare payments or
increased volume from Saltzer referrals. The district court
did not find that Saltzer physicians would inappropriately
label in-house services as hospital-based, or that they would
force patients to travel to the St. Luke’s hospital in Boise for
services that could be provided in-house in Nampa. And the
court did not identify any past actions that would allow it to
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 21

predict that St. Luke’s would act anticompetitively in the
future in the ancillary services market. Indeed, in post-
merger negotiations with Blue Shield, St. Luke’s did not do
so. We thus find that the ancillary services finding is not
supported by the record.

   4. The Prima Facie Case

    But absent the ancillary services finding, the district
court’s conclusion that a prima facie case was established is
amply supported by the record. “Section 7 does not require
proof that a merger or other acquisition has caused higher
prices in the affected market. All that is necessary is that the
merger create an appreciable danger of such consequences in
the future.” Hosp. Corp. of Am. v. FTC, 807 F.2d 1381, 1389
(7th Cir. 1986).

    The extremely high HHI on its own establishes the prima
facie case. See H.J. Heinz, 246 F.3d at 716; United States v.
Baker Hughes, Inc., 908 F.2d 981, 982–83 & n.3 (D.C. Cir.
1990). In addition, the court found that statements and past
actions by the merging parties made it likely that St. Luke’s
would raise reimbursement rates in a highly concentrated
market. See Hosp. Corp., 807 F.2d at 1388–89 (expressing
concern that a history of cooperation among hospitals could
lead to collusion when a merger caused the market to become
more concentrated). And, the court’s uncontested finding of
high entry barriers “eliminates the possibility that the reduced
competition caused by the merger will be ameliorated by new
competition from outsiders and further strengthens the FTC’s
case.” H.J. Heinz, 246 F.3d at 717.

    The facts found by the district court are similar to those
in other cases in which a prima facie violation of § 7 was
22 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

established. See, e.g., Chi. Bridge & Iron, 534 F.3d at
431–32 (high HHI, limited rivals, high entry barriers, and
customer perception); Lucas Auto. Eng’g, Inc. v.
Bridgestone/Firestone, Inc., 140 F.3d 1228, 1236–37 (9th
Cir. 1998) (reversing summary judgment for defendant
because undisputed facts showed high market share and
“insurmountable barriers to entry”); FTC v. Univ. Health,
Inc., 938 F.2d 1206, 1219–20 & n.27 (11th Cir. 1991) (high
market concentration, high entry barriers, and evidence that
defendants intended to eliminate competition with the
merger); Am. Stores, 872 F.2d at 841–43 (high market share,
and insufficient evidence of low entry barriers to rebut the
prima facie case). The district court did not clearly err in its
factual findings, which adequately support its ultimate
conclusion that the plaintiffs established “a prima facie case
that the Acquisition is anti-competitive.”

D. The Rebuttal Case

    Because the plaintiffs established a prima facie case, the
burden shifted to St. Luke’s to “cast doubt on the accuracy of
the Government’s evidence as predictive of future anti-
competitive effects.” Chi. Bridge & Iron, 534 F.3d at 423.
The rebuttal evidence focused on the alleged procompetitive
effects of the merger, particularly the contention that the
merger would allow St. Luke’s to move toward integrated
care and risk-based reimbursement.13

  13
    The district court found that a core reason for high health care costs
is the prevalent fee-for-service reimbursement model, based on the
apparently uncontested opinions of expert witnesses. Experts have
recommended moving toward integrated care and risk-based
reimbursement. “In an integrated delivery system, [PCPs] and specialty
physicians work as a team, with PCPs managing patient care and specialty
physicians consulting and providing care as needed.” Risk-based
     ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 23

    1. The Post-Merger Efficiencies Defense

    The Supreme Court has never expressly approved an
efficiencies defense to a § 7 claim. See H.J. Heinz, 246 F.3d
at 720. Indeed, Brown Shoe cast doubt on the defense:

         Of course, some of the results of large
         integrated or chain operations are beneficial to
         consumers. Their expansion is not rendered
         unlawful by the mere fact that small
         independent stores may be adversely affected.
         It is competition, not competitors, which the
         Act protects. But we cannot fail to recognize
         Congress’ desire to promote competition
         through the protection of viable, small, locally
         owned business. Congress appreciated that
         occasional higher costs and prices might
         result from the maintenance of fragmented
         industries and markets. It resolved these
         competing considerations in favor of
         decentralization. We must give effect to that
         decision.

370 U.S. at 344. Similarly, in FTC v. Procter & Gamble Co.,
the Court stated that “[p]ossible economies cannot be used as
a defense to illegality. Congress was aware that some
mergers which lessen competition may also result in


reimbursement (also known as capitation) means that “providers receive
reimbursement from insurers in the form of a set amount for each patient
rather than a payment for each service rendered. The set amount is based
on the average expected health care utilization for the patients given such
factors as their age and medical history.” “Capitation motivates providers
to consider the costs of treatment as they will share in the savings if they
can keep actual costs below the set amount they receive.”
24 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

economies but it struck the balance in favor of protecting
competition.” 386 U.S. 568, 580 (1967).

    Notwithstanding the Supreme Court’s statements, four of
our sister circuits (the Sixth, D.C., Eighth, and Eleventh) have
suggested that proof of post-merger efficiencies could rebut
a Clayton Act § 7 prima facie case. See ProMedica, 749 F.3d
at 571; H.J. Heinz, 246 F.3d at 720–22; Tenet, 186 F.3d at
1054–55; Univ. Health, 938 F.2d at 1222–24.14 The FTC has
also cautiously recognized the defense, noting that although
competition ordinarily spurs firms to achieve efficiencies
internally, “a primary benefit of mergers to the economy is
their potential to generate significant efficiencies and thus
enhance the merged firm’s ability and incentive to compete,
which may result in lower prices, improved quality, enhanced
service, or new products.” Merger Guidelines § 10; see also
Oliver E. Williamson, Economies as an Antitrust Defense
Revisited, 125 U. Pa. L. Rev. 699, 699 (1977)
(“Sometimes . . . a merger will . . . result in real increases in
efficiency that reduce the average cost of production of the
combined entity below that of the two merging firms.”).
However, none of the reported appellate decisions have
actually held that a § 7 defendant has rebutted a prima facie
case with an efficiencies defense; thus, even in those circuits
that recognize it, the parameters of the defense remain
imprecise.



 14
    Some courts have attempted to explain why the Supreme Court cases
do not recognize an efficiencies defense, see, e.g., H.J. Heinz, 246 F.3d at
720 n.18 (arguing that the “possible economies” language in Proctor &
Gamble does not ban an actual efficiencies defense), but others have
simply stated that the defense exists without addressing the language in
Brown Shoe and its progeny, see, e.g., ProMedica, 749 F.3d at 571.
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 25

    The status of the defense in this circuit remains uncertain.
A quarter of a century ago, we rejected an efficiencies
defense in RSR Corp. v. FTC, 602 F.2d 1317, 1325 (9th Cir.
1979). RSR, however, involved an argument that the merger
would allow the defendant to compete more efficiently
outside the relevant market. Id. More recent cases focus on
whether efficiencies in the relevant market negate the
anticompetitive effect of the merger in that market. See Univ.
Health, 938 F.2d at 1222. Even after RSR, several district
courts in this circuit have suggested that there could be such
a defense. See, e.g., United States v. Bazaarvoice, Inc., No.
13-cv-00133-WHO, 2014 WL 203966, at *64, *72–73 (N.D.
Cal. Jan. 8, 2014); United States v. Oracle Corp., 331 F.
Supp. 2d 1098, 1174–75 (N.D. Cal. 2004); but see California
v. Am. Stores Co., 697 F. Supp. 1125, 1132–33 (C.D. Cal.
1988) (finding that RSR barred an efficiencies defense), rev’d
on other grounds, 872 F.2d 837, rev’d on other grounds,
495 U.S. 271.

    We remain skeptical about the efficiencies defense in
general and about its scope in particular. It is difficult
enough in § 7 cases to predict whether a merger will have
future anticompetitive effects without also adding to the
judicial balance a prediction of future efficiencies. Indeed,
even then-Professor Bork, a sharp critic of Clayton Act
enforcement actions, see, e.g., Robert H. Bork and Wade S.
Bowman, Jr., The Crisis in Antitrust, 65 Colum. L. Rev. 363,
373 (1965), rejected the efficiencies defense, calling it
“spurious” because it “cannot measure the factors relevant to
consumer welfare, so that after the economic extravaganza
was completed we would know no more than before it
began,” Robert H. Bork, The Antitrust Paradox: A Policy at
War with Itself 124 (1978). Judge Richard Posner has
regularly expressed similar views. See Richard A. Posner,
26 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

Antitrust Law 133 (2d ed. 2001) (“I said back then that there
should be no general defense of efficiency. I still think this
is right. It is rarely feasible to determine by the methods of
litigation the effect of a merger on the costs of the firm
created by the merger.”); Richard A. Posner, Antitrust Law:
An Economic Perspective 112 (1976) (“I would not allow a
generalized defense of efficiency.”); cf. Frank H.
Easterbrook, The Limits of Antitrust, 63 Tex. L. Rev. 1, 39
(1984) (“[N]either judges nor juries are particularly good at
handling complex economic arguments . . . .”).

     Nonetheless, we assume, as did the district court, that
because § 7 of the Clayton Act only prohibits those mergers
whose effect “may be substantially to lessen competition,”
15 U.S.C. § 18, a defendant can rebut a prima facie case with
evidence that the proposed merger will create a more efficient
combined entity and thus increase competition. For example,
if two small firms were unable to match the prices of a larger
competitor, but could do so after a merger because of
decreased production costs, a court recognizing the
efficiencies defense might reasonably conclude that the
transaction likely would not lessen competition. See Merger
Guidelines § 10 (“Merger-generated efficiencies may enhance
competition by permitting two ineffective competitors to
form a more effective competitor, e.g., by combining
complementary assets. . . . [I]ncremental cost reductions may
reduce or reverse any increases in the merged firm’s incentive
to elevate price.”).

    Because we deal with statutory enforcement, the language
of the Clayton Act must be the linchpin of any efficiencies
defense. The Act focuses on “competition,” so any defense
must demonstrate that the prima facie case “portray[s]
inaccurately the merger’s probable effects on competition.”
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 27

Am. Stores, 872 F.2d at 842. In other words, a successful
efficiencies defense requires proof that a merger is not,
despite the existence of a prima facie case, anticompetitive.

    Courts recognizing the defense have made clear that a
Clayton Act defendant must “clearly demonstrate” that “the
proposed merger enhances rather than hinders competition
because of the increased efficiencies.” United States v. Long
Island Jewish Med. Ctr., 983 F. Supp. 121, 137 (E.D.N.Y.
1997). Because § 7 seeks to avert monopolies, proof of
“extraordinary efficiencies” is required to offset the
anticompetitive concerns in highly concentrated markets. See
H.J. Heinz, 246 F.3d at 720–22; see also Merger Guidelines
§ 10 (“Efficiencies almost never justify a merger to monopoly
or near-monopoly.”). The defendant must also demonstrate
that the claimed efficiencies are “merger-specific,” see
United States v. H & R Block, Inc., 833 F. Supp. 2d 36, 89–90
(D.D.C. 2011), which is to say that the efficiencies cannot
readily “be achieved without the concomitant loss of a
competitor,” H.J. Heinz, 246 F.3d at 722; see also Merger
Guidelines § 10 & n.13. Claimed efficiencies must be
verifiable, not merely speculative. See, e.g., FTC v. CCC
Holdings Inc., 605 F. Supp. 2d 26, 74–75 (D.D.C. 2009);
Oracle, 331 F. Supp. 2d at 1175; see also Merger Guidelines
§ 10.

   2. The St. Luke’s Efficiencies Defense

   St. Luke’s argues that the merger would benefit patients
by creating a team of employed physicians with access to
Epic, the electronic medical records system used by St.
Luke’s. The district court found that, even if true, these
predicted efficiencies were insufficient to carry St. Luke’s’
burden of rebutting the prima facie case. We agree.
28 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

    It is not enough to show that the merger would allow St.
Luke’s to better serve patients. The Clayton Act focuses on
competition, and the claimed efficiencies therefore must
show that the prediction of anticompetitive effects from the
prima facie case is inaccurate. See Univ. Health, 938 F.2d at
1222 (finding efficiencies relevant to the prediction of
“whether the acquisition would substantially lessen
competition”). Although the district court believed that the
merger would eventually “improve the delivery of health
care” in the Nampa market, the judge did not find that the
merger would increase competition or decrease prices. Quite
to the contrary, the court, even while noting the likely
beneficial effect of the merger on patient care, held that
reimbursement rates for PCP services likely would increase.
Nor did the court find that the merger would likely lead to
integrated health care or a new reimbursement system; the
judge merely noted the desire of St. Luke’s to move in that
direction.

    The district court expressly did conclude, however, that
the claimed efficiencies were not merger-specific.15 The
court found “no empirical evidence to support the theory that


 15
    St. Luke’s argues that once a defendant comes forward with proof of
efficiencies, the burden shifts to the plaintiff to show that there are ways
of achieving those efficiencies without the merger. This tracks the
Sherman Act analysis. See, e.g., Bhan v. NME Hosps., Inc., 929 F.2d
1404, 1412–14 (9th Cir. 1991). But, in Clayton Act § 7 cases, after a
plaintiff has made a prima facie case that a merger is anticompetitive, the
burden of showing that the claimed efficiencies cannot be “attained by
practical alternatives,” Merger Guidelines § 10 n.13, is properly part of the
defense, see Olin, 986 F.2d at 1305 (explaining that it is the defendant’s
“burden to rebut a prima facie case of illegality”). That burden, moreover,
is not unduly onerous, as the defendant need not disprove alternatives that
are “merely theoretical.” Merger Guidelines § 10.
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 29

St Luke’s needs a core group of employed primary care
physicians beyond the number it had before the Acquisition
to successfully make the transition to integrated care,” and
that “a committed team can be assembled without employing
physicians.” The court also found that the shared electronic
record was not a merger-specific benefit because data
analytics tools are available to independent physicians.

    These factual findings were not clearly erroneous.
Testimony highlighted examples of independent physicians
who had adopted risk-based reimbursement, even though they
were not employed by a major health system. The record also
revealed that independent physicians had access to a number
of analytic tools, including the St. Luke’s Epic system.

    But even if we assume that the claimed efficiencies were
merger-specific, the defense would nonetheless fail. At most,
the district court concluded that St. Luke’s might provide
better service to patients after the merger. That is a laudable
goal, but the Clayton Act does not excuse mergers that lessen
competition or create monopolies simply because the merged
entity can improve its operations. See Proctor & Gamble,
386 U.S. at 580. The district court did not clearly err in
concluding that whatever else St. Luke’s proved, it did not
demonstrate that efficiencies resulting from the merger would
have a positive effect on competition.

                         IV. Remedy

     “The key to the whole question of an antitrust remedy is
of course the discovery of measures effective to restore
competition.” United States v. E. I. du Pont de Nemours &
Co., 366 U.S. 316, 326 (1961). “[T]he relief must be directed
to that which is necessary and appropriate . . . to eliminate the
30 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

effects of the acquisition offensive to the statute . . . and
assure the public freedom from its continuance.” Ford Motor
Co. v. United States, 405 U.S. 562, 573 n.8 (1972) (internal
citation and quotation marks omitted). Section 7 remedies
should not be punitive, but “courts are authorized, indeed
required, to decree relief effective to redress the violations,
whatever the adverse effect of such a decree on private
interests.” E. I. du Pont, 366 U.S. at 326.

    The customary form of relief in § 7 cases is divestiture.
See id. at 330 (noting that most litigated Clayton Act § 7
cases “decreed divestiture as a matter of course”); see also
ProMedica, 749 F.3d at 573; RSR, 602 F.2d at 1325–26; Ash
Grove Cement Co. v. FTC, 577 F.2d 1368, 1379–80 (9th Cir.
1978). Divestiture is the “most important of antitrust
remedies,” and “should always be in the forefront of a court’s
mind when a violation of § 7 has been found.” E. I. du Pont,
366 U.S. at 330–31; see also id. at 329 (“The very words of
§ 7 suggest that an undoing of the acquisition is a natural
remedy.”). This is especially true when the government is the
plaintiff. See Am. Stores, 495 U.S. at 280–81 (“[I]n
Government actions divestiture is the preferred remedy for an
illegal merger or acquisition.”).

    St. Luke’s nonetheless argues that the district court erred
in ordering divestiture because (1) divestiture will not
actually restore competition; (2) divestiture eliminates the
transaction’s procompetitive benefits; and (3) a proposed
conduct remedy was preferable. We find no abuse of
discretion in the district court’s choice of remedy.

    Although divestiture may generally be the most
straightforward way to restore competition, E. I. du Pont,
366 U.S. at 331, a district court must consider whether it will
    ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS. 31

effectively do so under the facts of each case. “A primary
concern is whether the offending line of commerce, if
disassociated from the merged entities, can survive as a
viable, independent entity.” FTC v. PepsiCo, Inc., 477 F.2d
24, 29 n.8 (2d Cir. 1973). St. Luke’s argues that Saltzer
would no longer be able to compete post-divestiture, and that
divestiture therefore would not restore competition in the
Nampa PCP market.

     The district court had ample basis, however, for rejecting
that contention. Indeed, in opposing a preliminary injunction,
St. Luke’s assured the court that divestiture was feasible.
Moreover, Saltzer’s employees were assured by management
that they would have their jobs no matter the result of the
litigation, and a number of them testified that Saltzer would
be viable as an independent entity. The district court also
noted that “any financial hardship to Saltzer will be mitigated
by St. Luke’s payment of $9 million for goodwill and
intangibles as part of the Acquisition . . . .”

    Nor did the district court abuse its discretion in its
consideration of the costs and benefits of divestiture. The
court expressly determined that divestiture was appropriate
because any benefits of the merger were outweighed by the
anticompetitive concerns. See Am. Stores, 872 F.2d at 843.
The Supreme Court has specifically stated that “it is well
settled that once the Government has successfully borne the
considerable burden of establishing a violation of law, all
doubts as to the remedy are to be resolved in its favor.” E. I.
du Pont, 366 U.S. at 334.

   Finally, the district court did not abuse its discretion in
choosing divestiture over St. Luke’s’ proposed “conduct
remedy”—the establishment of separate bargaining groups to
32 ST. ALPHONSUS MED. CTR. V. ST. LUKE’S HEALTH SYS.

negotiate with insurers.16 Divestiture is “simple, relatively
easy to administer, and sure,” E. I. du Pont, 366 U.S. at 331,
while conduct remedies risk excessive government
entanglement in the market, see U.S. Dep’t of Justice,
Antitrust Division Policy Guide to Merger Remedies § II n.12
(2011) (noting that conduct remedies need to be “tailored as
precisely as possible to the competitive harms associated with
the merger to avoid unnecessary entanglements with the
competitive process”). The district court, moreover, found
persuasive the rejection of a similar proposal in In re
ProMedica Health System, Inc., No. 9346, 2012 WL
1155392, at *48–50 (FTC March 28, 2012), adopted as
modified, 2012 WL 2450574 (FTC June 25, 2012). Even
assuming that the district court might have been within its
discretion in opting for a conduct remedy, we find no abuse
of discretion in its declining to do so. See ProMedica,
749 F.3d at 572–73 (holding that the FTC did not abuse its
discretion in choosing divestiture over a proposed conduct
remedy).

                         V. Conclusion

    For the reasons stated above, we AFFIRM the judgment
of the district court.




  16
     Conduct remedies include “firewall, non-discrimination, mandatory
licensing, transparency, and anti-retaliation provisions, as well as
prohibitions on certain contracting practices.” U.S. Dep’t of Justice,
Antitrust Division Policy Guide to Merger Remedies § II.B (2011); see
also Areeda ¶ 990d.
