Lawsuit charges HCA operating hospital monopoly in North Carolina

HCA Healthcare
HCA Healthcare is being sued by several North Carolina residents charging that the hospital chain is operating a monopoly on care in the western part of the state. (HCA Healthcare)

Several North Carolina residents charge in a new lawsuit that hospital chain HCA Healthcare has raised costs and lowered quality after it fully acquired Mission Health in 2019.

The lawsuit, filed in a local court Tuesday, alleges HCA is cutting staff and costs at “an alarming rate” and leaves western North Carolina with bad healthcare. It is the latest scrutiny of mergers and acquisitions in the hospital industry, following concerns from the Federal Trade Commission (FTC) that such deals can lower quality.

“Reduced quality and higher prices are the hallmark effects of an unregulated monopoly,” charges the lawsuit.

It said HCA holds approximately 90% of the market share for inpatient hospital care in Buncombe County, the most populous area in western North Carolina.

“Because insurers and consumers in the region have no choice but to use HCA, HCA has free rein to dictate the prices it charges insurers and consumers while at the same time undermining quality to cut costs,” the lawsuit said.

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Mission Health created the monopoly when it merged in 1995 with its competitor St. Joseph’s Hospital, the lawsuit said. However, the state granted an exception if the hospital agreed to state oversight.

The state repealed the restrictions in 2016, but Mission Health lost any immunity from antitrust lawsuits.

The residents argue that Mission Health employed anti-competitive tactics that include gag clauses and “all-or-nothing” arrangements that require insurers to include all hospitals and physician networks in a contract.

HCA bought Mission Health’s assets in 2019, and the lawsuit argues it employed the same tactics.

The chain also “refused to comply with a rule enacted by President Trump’s administration to increase transparency in healthcare pricing,” the lawsuit said. “Were HCA to comply and reveal to consumers and regulators the true prices that it charges, the public would know that HCA/Mission’s prices for key services are by far the highest in North Carolina.”

HCA charges more than two times the state average for a caesarean section delivery without complications, the lawsuit added.

Once it is served with the lawsuit, HCA will "respond appropriately through the legal process," spokesperson Nancy Lindell said in a statement to Fierce Healthcare. 

She added that the system has made major investments in the area. 

"Mission Health is committed to the health and well-being of every person who comes to us for care and we are proud of our dedicated hospital teams," she added.

The legal filing is the latest attack on hospital deals as the federal government has also ratcheted up scrutiny.

Memphis, Tennessee-based Methodist LeBonheur abandoned a bid to buy two Tenet-owned hospitals in the city area after concerns from the FTC. A federal judge halted a proposed merger between New Jersey-based Hackensack Meridian Health and Englewood Health after the FTC challenged the deal, arguing it would lead to higher rates for patients.

President Joe Biden also issued an executive order in July calling for federal agencies to take a closer look at the impacts of such mergers.

But the scrutiny has not led to a cooling-off period of deal-making in the hospital industry. The FTC recently said it has been difficult to keep up with the influx of mergers and acquisitions in the healthcare space.