FTC sues to block hospital acquisitions in New Jersey, Utah

The Federal Trade Commission has filed lawsuits to block RWJBarnabas Health’s acquisition of St. Peter’s HealthCare System in New Jersey and HCA Healthcare’s acquisition of five Steward Health Care System hospitals in Utah, regulators said Thursday. .

The proposed deal in New Jersey would give the West Orange-based nonprofit health system a 50% market share for general acute care services in Middlesex County, according to the complaint. HCA Healthcare’s for-profit acquisition of five Steward Health Care System hospitals in Utah would reduce the number of health systems offering acute services from three to two in some markets, the FTC said.

In either case, the transactions would eliminate direct competitors and incentives to lower prices and improve care, Holly Vedova, director of the FTC’s competition bureau, said in press releases.

“St. Peter’s University Hospital is less than a mile from [RWJBarnabas] in New Brunswick, and those are the only two hospitals in that city,” Vedova said. “There is overwhelming evidence that this acquisition would be bad for patients.

Nashville, Tennessee’s HCA Healthcare and the Dallas-based, for-profit Steward Health Care System are the second and fourth largest health care systems in the Salt Lake City area, respectively. As such, the two companies are “currently keeping costs low for consumers by competing vigorously,” Vedova said in a press release. “If these companies merge, this competition will be lost and Steward will no longer be available to patients as a low-cost provider in this region.”

RWJBarnabas Health is “incredibly disappointed” and is reviewing the FTC complaint to determine its next steps, the company said in a statement. St. Peter’s HealthCare System, HCA Healthcare and Steward Health Care System did not immediately respond to requests for comment.

St. Peter’s HealthCare System, a Catholic not-for-profit provider, operates the last independent hospital in Middlesex County. The combined entity would be able to demand higher reimbursements from health insurance companies because the only other acute care hospitals in the county are outside of New Brunswick, the FTC said. According to the FTC, insurers would likely pass these costs on to employers and policyholders. New Jersey officials approved the deal last month and did not sign the FTC complaint.

In Utah, where HCA Healthcare currently owns eight hospitals, the acquisitions would strengthen the company’s competitiveness against Salt Lake City-based Intermountain Healthcare. Intermountain Healthcare, the state‘s largest healthcare provider, recently merged with SCL Health of Broomfield, Colo., to form a $14 billion system with 33 hospitals

The trial involving RWJBarnabas Health and St. Peter’s HealthCare System is scheduled for Nov. 29. The HCA Healthcare-Steward Health Care System trial is scheduled for December 13.

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