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Feds sue to block Geisinger's partial acquisition of 132-bed hospital

The U.S. Justice Department sued to block Danville, Pa-based Geisinger's partial acquisition of a 132-bed hospital in Lewisburg, Pa. 

In the antitrust suit, filed Aug. 5, prosecutors said Geisinger and Evangelical are close competitors for inpatient acute care for patients in six counties in Pennsylvania. 

As a result, Geisinger's plan to acquire a 30 percent ownership stake in Evangelical Community Hospital would "fundamentally" alter the relationship between the two organizations and reduce incentives to "compete aggressively against each other," the complaint reads.

The suit also claims the agreement between the two parties would result in higher prices, lower care quality and reduced access to inpatient hospital services.

The Justice Department said Geisinger initially sought to acquire Evangelical  Community Hospital in full. But, instead pursued a partial acquisition agreement "in part to avoid antitrust scrutiny," according to the suit. 

"Preserving competition in healthcare markets is a priority for the Department of Justice because of its important impact on the health and well-being of Americans," said Makan Delrahim, an assistant attorney general of the Justice Department's antitrust division. "This agreement between Geisinger and Evangelical threatens to harm patients in central Pennsylvania by reducing competition that has improved the price, quality, and availability of healthcare in the region."

"We are disappointed by the decision and continue to believe enhancing our relationship with Geisinger is in the best interest of the region and will provide efficient, cost-effective healthcare to the communities we serve," Kendra Aucker, president and CEO of Evangelical Community Hospital, told PennLive. 

More articles on healthcare transactions:
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Prospect Medical Holdings tries to block sale of 384-bed bankrupt California hospital
6 hospital deals canceled, delayed

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