The Justice Department and FTC recently updated their merger guidelines, which aim to prevent health systems from merging if the consolidation would hinder potential competitors from entering the market or reduce incentives to offer higher wages. The guidelines could also be applied to challenge cross-market mergers, which have historically been more difficult to regulate.
The outcome of the presidential election could change how the FTC evaluates health system mergers and acquisitions. Under Democratic administrations, the agency has typically taken a stricter approach to M&A, focusing on concerns such as market consolidation, increased prices and reduced competition.
President-elect Donald Trump is likely to take a more permissive view toward major M&As. Mr. Trump’s previous administration approved CVS Health’s $69 billion acquisition of Aetna in 2018, and a Republican administration may favor a more lenient regulatory approach, emphasizing market freedom and potentially easing some of the current restrictions. This could mean a higher likelihood of approval for health system deals, especially if they can demonstrate potential benefits such as operational efficiency, expanded access to care and improved health outcomes for patients.
Here are eight hospital transactions that were called off after enforcement actions or challenges by the FTC over the last three years:
1. HCA Healthcare and Union Health
In November, Terre Haute, Ind.-based Union Health withdrew its certificate of public advantage agreement for its proposed merger with Terre Haute Regional Hospital, a 278-bed facility operated by Nashville, Tenn.-based HCA. Union Health pulled its COPA application nine days before the state was set to make a final decision on the transaction. The FTC in September advised state officials against approving the deal, arguing that it would “likely impose higher costs and could lead to worse healthcare outcomes for Indiana patients, as well as lower wage growth for hospital workers.” Union Health said it plans to resubmit a COP application for the transaction.
2. Novant Health and Community Health Systems
In June, Winston-Salem, N.C.-based Novant Health scrapped its planned $320 million acquisition of two hospitals from Franklin, Tenn.-based CHS after an appellate court granted the FTC an emergency injunction blocking the deal. The FTC argued that Novant’s acquisition of Lake Norman Regional Medical Center and Statesville, N.C.-based Davis Regional Medical Center would “irreversibly consolidate the market for hospital services in the Eastern Lake Norman Area in the northern suburbs of Charlotte.” Novant called off the deal after “the FTC’s continued roadblocks” and said it did not “see a way to finalize this transaction.”
3. John Muir Health and Tenet Healthcare
In December 2023, Walnut Creek, Calif.-based John Muir Health called off plans to fully acquire San Ramon (Calif.) Regional Medical Center from majority owner Dallas-based Tenet Healthcare. The FTC sued to block the deal, arguing that it would drive up healthcare costs in the area by eliminating head-to-head competition between John Muir and Tenet. The health systems said they strongly disagreed with the FTC but decided not to fight the agency in court “due to the cost and disruption of litigation,” according to a statement shared with Becker’s.
4. Steward Health Care and HCA Healthcare
In June 2022, Nashville, Tenn.-based HCA and Dallas-based Steward Health Care spiked their proposed deal that would have sees five Utah hospitals move to HCA. The FTC alleged the acquisition would eliminate the second-and fourth-largest health systems in Utah’s Wasatch Front region, where about 80% of the state’s residents live. The systems called off the plan 13 days after the FTC sued to block the deal.
5. RWJBarnabas Health and Saint Peter’s Healthcare System
In June 2022, two New Jersey systems — New Brunswick-based Saint Peter’s Healthcare System and West Orange-based RWJBarnabas Health — terminated a definitive agreement to merge after the FTC filed a suit to block the transaction. The commission alleged the deal would eradicate head-to-head competition between the two systems and increase prices for inpatient general acute care services. The deal would have given the combined health system a market share of about 50% for general acute care services in Middlesex County as a whole, resulting in a presumption of harm under the antitrust laws, according to the FTC.
6. Hackensack Meridian Health and Englewood Health
Edison, N.J.-based Hackensack Meridian Health and Englewood Health tore up plans to merge in April 2022 after a U.S. appellate court affirmed the order of the district court to block the deal. The FTC challenged the deal in 2020, arguing it would give Hackensack Meridian control of three of the six hospitals in Bergen County and raise healthcare costs. A district court judge agreed the acquisition would raise prices, despite the systems arguing that merging some operations would bring savings.
7. Care New England and Lifespan
In February 2022, Providence, R.I.-based Lifespan and Care New England called off plans to merge after the FTC filed a suit to block the deal. The merger would have given the combined system 80% of the market’s hospital beds and ownership of eight of Rhode Island’s 13 hospitals. The FTC cited competition concerns in its decision. Rhode Island Attorney General Peter Neronha said the state would join the FTC in the lawsuit, stating the deal would raise healthcare costs.
8. Crouse Health System and State University of New York Upstate Medical University
Syracuse, N.Y.-based SUNY Upstate Medical University and Crouse Health System abandoned plans to merge in February 2022 after the FTC voiced its opposition to the deal. The commission claimed the transaction would leave Syracuse with just two hospital systems — Upstate and St. Joseph’s Health — and give the combined entity a 67% share of commercially insured inpatient services in Onondaga County.
