The Federal Trade Commission 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 announced Thursday.
The proposed deal in New Jersey would give the West Orange-based not-for-profit health system a 50% market share for general acute care services in Middlesex County, according to the complaint. For-profit HCA Healthcare's 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 both cases, the transactions would eliminate direct competitors and incentives to reduce prices and improve care, Holly Vedova, director of the FTC's bureau of competition, said in news releases.
"St. Peter's University Hospital is less than 1 mile away from [RWJBarnabas] in New Brunswick, and they are the only two hospitals in that city," Vedova said. "There is overwhelming evidence that this acquisition would be bad for patients."
HCA Healthcare of Nashville, Tennessee, and Dallas-based, for-profit Steward Health Care System are the second- and fourth-largest health systems, respectively, in the Salt Lake City area. As such, the two companies currently "keep costs down for consumers by competing vigorously with each other," Vedova said in a news 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. HCA Healthcare is disappointed and is evaluating its options, claiming that the proposed acquisition would benefit patients, payers and providers, the company said in a statement. Steward Health Care System argued that the FTC has misread the pro-competitive potential of this transaction by ignoring outpatient migration patterns and "completely ignored that the market is dominated by two different major health systems," the company said in a statement.
St. Peter's HealthCare System, a not-for-profit Catholic 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. Insurers would likely pass on those costs to employers and policyholders, according to the FTC. New Jersey officials approved the deal last month and did not sign onto the FTC complaint.
In Utah, where HCA Healthcare currently owns eight hospitals, the acquisitions would boost 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, Colorado, 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 set for Dec. 13.
