FTC targets hospital mergers

The government is ramping up efforts to block hospital mergers, citing that some hospital deals lead to significantly higher prices, The Wall Street Journal reported.

"If you want to do something about controlling costs in healthcare, you have to challenge anticompetitive hospital mergers," Federal Trade Commission Chairman Jon Leibowitz told the newspaper.

The FTC scored a win last year when an administrative judge ruled that a partnership between ProMedica and St. Luke's Hospital in Ohio was anticompetitive. With fears of market dominance, the commission also filed a complaint last year to halt an acquisition deal between Illinois health systems, OSF HealthCare and Rockford Health System, citing antitrust violations.

Recent research validates the commission's claim that hospital mergers are driving up prices, noted the Wall Street Journal. A University of California, Berkeley health-economics professor found that private insurers paid 29 to 56 percent more for procedures in hospital markets with fewer competitors.

Despite the FTC's crusade, a new report from Moody's Investor Service projects the pace of nonprofit hospital mergers and acquisitions to pick up speed. According to the report, higher payments from insurers, enhanced efficiency and a competitive advantage in the marketplace are driving the wave of hospital consolidations.

For more information:
- read the WSJ article
- check out the Moody's statement