Federal regulators are celebrating the close of an Ohio hospital acquisition as a victory for antitrust enforcement and an example of how distressed hospitals should conduct a good-faith shop process when seeking a lifeline.
In late 2024, the 222-bed Fairfield Medical Center signed a non-binding letter of intent to potentially join the 16-hospital OhioHealth system. This past week, however, the facility celebrated the close of another deal—its acquisition by the smaller Adena Health, just a few months after the two organizations had shared word of their own nonbinding letter of intent.
“Our responsibility has always been to ensure Fairfield Medical Center is positioned to serve our communities well into the future,” John R. “Jack” Janoso Jr., Fairfield Medical Center president and CEO, said in this week’s announcement. “I believe joining Adena Health provides that strong path forward, and I am confident in all that is ahead.”
The Federal Trade Commission, in a Wednesday release and accompanying statement from Chairman Andrew Ferguson, took credit for the hospital’s pivot.
The regulator said that it and the Ohio Attorney General’s Office had investigated the initial proposed deal and determined that it would have “threatened substantially to reduce competition among hospitals in this region, risking higher costs and diminished quality of care for patients across southeastern Ohio,” Ferguson said.
Officials then “encouraged” Fairfield to cast a wider net, upon which the hospital “attracted interest from multiple potential buyers” and ultimately led to Adena. The new owner now runs five hospitals in the state and, notably for the FTC, did not have a hospital in Fairfield County or its surrounding areas.
“The Commission remains vigilant in preserving healthcare competition, especially when reviewing deals involving hospitals that serve rural communities,” FTC Bureau of Competition Director Daniel Guarnera said in a statement. “Today’s announcement should serve as a reminder that we will stop bad hospital deals.”
The chairman’s statement on the matter (PDF) provided both a warning—“financial distress is not a blank check for mergers” that harm competition—and a broad outline of what the regulator is looking for in the shop process. Per the FTC’s Merger Guidelines and longstanding Supreme Court precedent, struggling hospitals, he said, may only claim a “failing firm defense” for an anticompetitive deal if there is a “grave probability of a business failure,” “dim or nonexistent” prospects of a bankruptcy reorganization and if the buyer is the “only available purchaser” following a good-faith shop process.
“The mere fact, then, that a close competitor is willing to buy the financially distressed hospital is not sufficient to justify an otherwise unlawful risk of harm to patients and healthcare workers,” the chairman wrote.
On a general basis, FTC staff judge whether or not a shop process is adequate by reviewing whether a firm sought interest from a “full set of potential buyers,” whether those potential buyers were given sufficient time and information to gauge a deal, whether the seller engaged with those options in good faith and whether the seller “appropriately” weighed offers from buyers who would not bring competitiveness concerns, Ferguson’s statement explained.
“Notably, these factors are often in the seller’s financial interest and may yield more attractive offers than a truncated sales process to a handful of bidders,” he added. “Regardless, … if that search process yields an offer that would preserve competition, rather than substantially lessen it, the seller may not accept the anticompetitive offer even if it is more lucrative to do so.”
Following the deal’s close, Adena now comprises five hospitals and more than 50 locations across 11 central and southern Ohio counties, and employs about 6,000 people. In fiscal year 2025, it reported $815 million in total revenue and a $7.2 million operating income (0.9% operating margin).
OhioHealth, meanwhile, has been in officials’ crosshairs over separate allegations of anticompetitive behavior. In February, the Ohio attorney general and the Department of Justice alleged that the nonprofit leaned on its market strength to “force” payers into noncompetitive contracts. The system and the government announced an agreement in June settling those allegations, though OhioHealth does not admit any wrongdoing and maintains that its contracting practices were and continue to be lawful and appropriate.