The Federal Trade Commission is two-for-two this month on hospital merger challenges, announcing Thursday that HCA Healthcare and Steward Health Care System have decided to abandon a proposed five-hospital transaction contested by the regulator earlier this month.
The news comes just days after New Jersey’s RWJBarnabas Health and Saint Peter’s Healthcare System threw in the towel on plans to merge. The FTC had announced plans to block both “anti-competitive” hospital deals on June 2.
“For the second time in a week, parties who proposed an anti-competitive hospital merger have called their deal off after the FTC filed a complaint to block the deal,” FTC Bureau of Competition Director Holly Vedova said in a statement. “This transaction, like the RWJBarnabas Health/Saint Peter’s transaction that was abandoned two days ago, should never have been proposed in the first place.”
HCA and Steward’s deal, announced in September 2021, would have added five Utah hospitals to the former’s 11-hospital Mountain Division.
Had it gone through, the sale would have combined the second- and fourth-largest systems in the Salt Lake City and Utah’s Wasatch Front region, “resulting in higher prices, less innovation and lower quality care for patients,” Vedova said. Approximately 80% of Utah’s residents live in the markets that would have been impacted by the sale.
Nashville, Tennessee-based HCA and Dallas, Texas-based Steward are both for-profit systems with locations scattered across the country. HCA operates 182 hospitals while Steward controls 41.
FTC’s commissioners had voted 5-0 to issue an administrative complaint and to authorize agency staff to seek a temporary restraining order and preliminary injunction.
Shortly after, Steward said it believed the agency "misread the pro-competitive potential of this transaction and completely ignored the fact that the market is, in fact, dominated by two different major health systems." At the time, the system said it would continue advocating for the deal and review its options.
“This should be a lesson learned to hospital systems all over the country and their counsel: the FTC will not hesitate to take action in enforcing the antitrust laws to protect healthcare consumers who are faced with unlawful hospital consolidation,” Vedova said. “I am glad that patients and healthcare providers will not have to endure any more uncertainty while waiting for courts to rule on the FTC’s legal challenges.”
The FTC has talked a big game on antitrust enforcement since last summer when President Joe Biden issued a sweeping executive order tasking the regulator to take a closer look at healthcare mergers and provider consolidation “to ensure patients are not harmed.”
The FTC’s efforts also yielded a win in April after more than a year of sustained resistance led Hackensack Meridian Health and Englewood Health to call off plans to merge. That deal would have placed half of the inpatient general acute care hospitals in New Jersey’s most populous county under the control of the state’s largest healthcare system.