FTC moves to block hospital merger in West Virginia: 6 things to know

The Federal Trade Commission has authorized action to block the merger of Cabell Huntington (W.Va.) Hospital and Huntington-based St. Mary's Medical Center.

Here are six things to know about the proposed deal and the FTC's allegations regarding the transaction.

1. In an administrative complaint filed Nov. 6, the FTC claims Cabell Huntington Hospital's proposed acquisition of St. Mary's Medical Center would have negative consequences for local residents and employers.

2. The FTC alleges the two hospitals — which are located just 3 miles apart — are each other's closest competitor for health plans and patients, and that the acquisition would substantially lessen competition between the hospitals for patients and for inclusion in health plan networks.

3. "If this proposed acquisition goes forward, it would eliminate important competition that has yielded tremendous benefits for Huntington-area residents," said Steve Weissman, deputy director of the FTC's Bureau of Competition. "The merged hospitals would have a market share of more than 75 percent, and local employers and residents are likely to face higher prices and reduced quality and service at the combined hospital."

4. Cabell Huntington Hospital President and CEO Kevin Fowler disagreed with the FTC's allegations. He said the FTC's action "misreads the highly competitive landscape" in the region and overlooks the community benefits that the combination of the two hospitals would provide, according to a MetroNews report.

5. The hospitals began merger talks in 2014. In July of this year, the hospitals entered into temporary agreements with the West Virginia Attorney General and the largest health plan in the area in an attempt to avoid a merger challenge. However, the FTC says those agreements "fall short of replicating the benefits of competition." In addition, when those agreements expire, "Huntington-area employers and residents will be subject to the full harmful effects of a virtual monopoly for hospital services in their community," according to the FTC's complaint.

6. The FTC also authorized staff to seek a temporary restraining order and a preliminary injunction in federal court if, and when, necessary to prevent the hospitals from consummating the acquisition. The FTC may not immediately pursue an action in federal court because the merging hospitals are still awaiting approvals from the West Virginia Health Care Authority and the Catholic Church before they can close the transaction, which may take months.

More articles on healthcare industry transactions:

BJC HealthCare, Memorial Hospital affiliation finalized
Cleveland Clinic takes over Akron General Health System
31 hospital transactions and partnerships in October


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

 

Featured Webinars

Featured Whitepapers