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FTC files suit to block 2 hospital deals

The Federal Trade Commission unanimously voted to block two separate hospital transactions, one involving Saint Peter's Healthcare System and RWJBarnabas Health and the other involving HCA Healthcare and Steward Health Care System, the agency announced June 2. 

Saint Peter's Healthcare System and RWJBarnabas Health

Background: Saint Peter's Healthcare System and RWJBarnabas Health, two New Jersey health systems, signed a definitive agreement to combine in September 2020. The development followed the systems' move in December 2019 to explore a partnership. Saint Peter's, based in New Brunswick, includes a 478-bed teaching hospital and children's hospital. RWJBarnabas Health, headquartered in West Orange, includes 12 acute care hospitals, three children's hospitals and several other sites of care to make it the largest academic healthcare system in New Jersey. 

The latest: "Saint Peter's University Hospital is less than one mile away from [RWJBarnabas] in New Brunswick, and they are the only two hospitals in that city," FTC Bureau of Competition Director Holly Vedova said in a June 2 news release from the agency. The FTC's complaint to block the acquisition of Saint Peter's by RWJBarnabas alleges the consolidation will harm competition for inpatient general acute care services in Middlesex County, resulting in a combined market share of approximately 50 percent for general acute care services in the county. 

Next steps: The federal court complaint and request for preliminary relief will be filed in the U.S. District Court for the District of New Jersey to halt the transaction pending an administrative proceeding. The administrative trial is scheduled to begin on Nov. 29.

 

HCA Healthcare and Steward Health Care System

Background: Nashville, Tenn.-based HCA Healthcare announced plans to acquire five Utah hospitals from Dallas-based Steward Health Care in September 2021. Under the proposed acquisition, the five hospitals would become part of HCA Healthcare's mountain division, which has 11 hospitals throughout Utah, Idaho and Alaska. 

The latest: The FTC alleges the acquisition would eliminate the second and fourth largest healthcare systems in Utah's Wasatch Front region, where approximately 80 percent of the state's residents live. Ms. Vedova with the FTC said in a June 2 news release Steward and HCA "keep costs down for consumers by competing vigorously with each other," and that competition would be lost under the proposed acquisition, and ​​Steward would no longer be available to patients as a "low-cost provider" in the region. The agency contends the number of healthcare systems offering inpatient general acute care hospital services would decrease from three competitors to two in some Utah markets and from four competitors to three in others. The FTC's complaint also names Steward CEO Ralph de la Torre, MD.  

Next steps: The federal court complaint and request for preliminary relief will be filed in the U.S. District Court for the District of Utah to halt the transaction pending an administrative proceeding. The administrative trial is scheduled to begin on Dec. 13. 

In a statement shared with Becker's, Steward said it is deeply disappointed by the FTC's decision. "We believe the FTC has misread the pro-competitive potential of this transaction and completely ignored the fact that the market is, in fact, dominated by two different major health systems. The FTC's analysis is also based on antiquated methods that do not take into account such things as outpatient migration patterns," the statement reads. 

"As such, we will continue to advocate strongly for this sale that would not only support continued investment but also expand care options for communities across the state of Utah, driving down healthcare costs and continuing to increase quality. We are exploring a variety of options and upon further review, we will make a determination regarding the next steps."

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