RWJBarnabas Health and Saint Peter’s Healthcare System have thrown in the towel on merger plans that were blocked earlier this month by the Federal Trade Commission (FTC), according to Tuesday announcements from the systems.
The New Jersey organizations had signed a definitive agreement in late 2020 to pursue integration plans that would form what they described as the state’s “first premier academic medical center.”
“This difficult decision was not reached lightly,” said Barry H. Ostrowsky, CEO of RWJBarnabas Health, in a statement. “We are disappointed in the termination of the proposed transaction, which we believe would have transformed quality, increased access and decreased the overall cost of care for the people of this state through the creation of a premier academic medical center.”
Saint Peter’s said the decision to call off the deal was shared between the two organizations.
“We are now assessing the best way to move forward as we consider potential options to ensure Saint Peter’s longstanding Catholic healthcare mission,” Saint Peter’s President and CEO Leslie D. Hirsch said.
Despite picking up an approval from New Jersey regulators in May, the FTC brought the hammer down on the proposed merger between RWJBH and Saint Peter’s with a preliminary injunction and long-term plans to fight the deal in court.
The federal agency said earlier this month there was “overwhelming evidence” that the “anticompetitive” deal would have harmed patients living in the systems’ markets.
“The transaction would have combined two hospitals located less than a mile from each other, which also happen to be the only two hospitals in the city of New Brunswick, New Jersey,” FTC Bureau of Competition Director Holly Vedova said in a new statement. “With combined shares of approximately 50% for inpatient general acute care services in Middlesex County, New Jersey, the transaction was presumptively unlawful and would have resulted in higher prices and lower quality of care for New Jersey residents.”
West Orange, New Jersey-based RWJBarnabas is a nonprofit operating 12 general acute care hospitals as well as ambulatory surgical centers, a pediatric rehabilitation hospital and a free-standing behavioral health center.
New Brunswick-based St. Peter’s is a Catholic nonprofit headlined by the 478-bed Saint Peter’s University Hospital. It also operates a children’s hospital, primary and specialty care networks and a surgical center.
Vedova said the complaint against RWJBH and Saint Peter’s was the third filed by the FTC against a potential hospital merger this year—a “reminder that the FTC remains vigilant” against “unlawful hospital consolidation.”
“The abandonment of this transaction is a testament to the efforts that our staff bring day in and day out to preserve competition and protect consumers,” she said.
FTC’s action against the New Jersey hospitals came alongside resistance to Steward Health Care’s planned sale of five Utah hospitals to HCA Healthcare. Steward recently said it believed the agency “misread the procompetitive potential of this transaction” and will be continuing to advocate for the transaction.
Elsewhere in New Jersey, Hackensack Meridian Health and Englewood Health scrapped their own plans for a merger that was similarly opposed by the FTC. That deal would have placed three of Bergen County, New Jersey’s six inpatient general acute care hospitals under the control of the state’s largest healthcare system.