FTC takes action to block hospital transactions in Utah and New Jersey | Robinson+Cole Healthcare Law Diagnosis

On June 2, 2022, the Federal Trade Commission announced a pair of antitrust enforcement actions to block pending healthcare system transactions that it says would harm competition in the provision of general acute care hospital services to patients. hospitalized.

First, the FTC authorized filing of an administrative complaint accompanied by a federal lawsuit against a proposed transaction between HCA Healthcare and Steward Health Care System involving Utah hospitals (the “Utah Transaction”). HCA and Steward are “healthcare competitors” in Utah that the FTC describes as the second and fourth largest health care systems, respectively, in Utah’s Wasatch Front region (which contains approximately 80% of residents of Utah). The FTC alleges that the Utah transaction would reduce the number of systems offering general acute care hospital services to inpatients, significantly increase market concentration, and eliminate a low-cost competitor that could allow the surviving entity to demand higher trade refunds leading to higher costs. sharing obligations for consumers. Interestingly, according to the FTC, its complaint will individually name Steward’s CEO and majority shareholder, in addition to naming HCA and Steward.

Second, the FTC in the same way authorized submission of an administrative file complaint and a federal lawsuit to stop the proposed New Jersey acquisition (the “New Jersey Transaction”) of Saint Peter Health System by RWJBarnabas Health. The FTC alleges that the New Jersey transaction would harm competition for general inpatient critical care services in Middlesex County, NJ, where the combined system would have a commercial market share of approximately 50% for such services. . The Director of the FTC’s Competition Bureau notes in a press release that Saint Peter’s and RWJ have the only hospitals in New Brunswick, NJ, and according to the FTC, each side views the other as its most significant competitor. In this case, the FTC also expresses concern that allowing the transaction to proceed in New Jersey would eliminate competition, increase market concentration, and allow RWJ to obtain higher trade refunds from insurers with fewer options, which the FTC says will “harm consumers.”

Notably, the FTC’s vote in favor of filing the two cases was unanimous (5-0). The FTC’s taking of these actions demonstrates the government’s continued concern with competition and consolidation in the healthcare marketplace. We will continue to monitor these and other antitrust cases as they progress.

[View source.]

Comments are closed.