FTC scores victories against hospital mergers using century-old law

The Federal Trade Commission (FTC), one of the only federal regulatory agencies contesting healthcare mergers, is scoring successes through a 100-year-old law, the New York Times reported.

The FTC is using the Clayton Antitrust Act to beat back some mergers, according to the article. "The FTC is on a winning streak," Melinda Hatton, senior vice president and general counsel of the American Hospital Association, told the Times, and its success has had what she termed a "chilling effect" on mergers, although the organization has said in the recent past that consolidations are not a major trend anyway.

Recent FTC victories include blocking of hospital deals in Albany, Georgia; Toledo, Ohio; and Rockford, Illinois. The agency also appears to have prevailed over Idaho-based St. Luke's attempt to acquire Saltzer Medical Group.

FTC officials cite several reasons to justify their actions, including the concentration of market forces that stifle competition. "Hospitals that face less competition charge substantially higher prices," Martin S. Gaynor, director of the FTC's bureau of economics, told the Times. He added that the price increases could be as much as 50 percent. A former high-ranking FTC said the Affordable Care Act "unleashed a merger frenzy." FTC officials also said their job would not be forestalled by arguments that merging healthcare entities led to a more efficient delivery of healthcare services.

Officials with ProMedica, the Ohio-based chain involved in the Toledo case, suggested they were all but overwhelmed by the FTC's attitude. "The government has lots of resources and lots of lawyers. Their attitude was adversarial," ProMedica General Counsel Jeffrey Kuhn told the Times. "Our trustees and top executives had to fly to Washington to be deposed. We were eager to tell our story, but it quickly turned into an inquisition. We turned over millions of pages of documents, at great expense."

Yet despite the FTC's action, recent data on healthcare mergers and acquisitions suggest they are on the rise.

To learn more:
- read the New York Times article

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