Sponsored by VMG Health | info@vmghealth.com | 214.369.4888

FTC challenge of Philadelphia hospital merger 'myopic,' AHA says

The American Hospital Association is blasting the Federal Trade Commission's challenge of the merger of Jefferson Health and Einstein Healthcare Network, according to the Philadelphia Business Journal.

In late February, the FTC announced it would sue to block the merger of the two Philadelphia-based health systems, staying it would reduce competition in both Philadelphia and Montgomery counties. The deal has been pending since 2018.

But the hospital association, which represents 5,000 hospitals and health systems nationwide, sent a letter to leaders in the House and Senate, arguing the FTC is wrong to challenge the deal.

In deciding to block the transaction, the FTC "once again relied on its simplistic, one-dimensional economic model that fails to account for the realities of providing healthcare — particularly in underserved communities," the association wrote in the letter, according to the Journal.

Thomas Nickels, the association's executive vice president, said that the model the FTC uses to predict future price effects of hospital transactions is flawed and allows it to side with insurers at the expense of patients.

The model fails to acknowledge how the merger can improve healthcare access in poorer communities and ignores the ability of the combined health system to spread costs over a larger patient base, Dr. Nickels argued.

"It is time for members of Congress and other policymakers to make clear that the antitrust enforcement in the hospital sector needs to account for all relevant factors, not simply the FTC's myopic modeling of speculative future results of contract negotiations between large commercial health insurance companies and hospitals," Dr. Nickels said, according to the Journal. 

More articles on healthcare industry transactions:
Maryland hospital ceases inpatient care post-merger
6 hospitals investing in express care
Baylor Scott & White sells in-house construction division

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers