FTC Seeks to Block Novant Well being Acquisition in North Carolina

The Federal Commerce Fee continues to carefully scrutinize well being system mergers. In its most up-to-date motion, it has sued to dam Novant Well being, Inc.’s $320 million acquisition of two North Carolina hospitals from Neighborhood Well being Techniques Inc. (CHS).

The FTC issued an administrative criticism and licensed a lawsuit in federal court docket to dam the proposed acquisition, alleging that Novant Well being’s proposed deal to accumulate Lake Norman Regional Medical Heart and Davis Regional Medical Heart from CHS threatens to lift costs and scale back incentives to put money into high quality and progressive care that will profit sufferers.

“Hospital consolidations typically result in worse outcomes for nurses and medical doctors, lead to larger costs, and may have life and demise penalties for sufferers,” mentioned Henry Liu, director of the FTC’s Bureau of Competitors, in an announcement. “There may be overwhelming proof that Novant’s cope with Neighborhood Well being Techniques might be detrimental to sufferers within the Jap Lake Norman Space, together with resulting in larger out-of-pocket prices for essential well being care companies.”

The FTC notes that Novant operates Huntersville Medical Heart and serves extra sufferers than another hospital within the Jap Lake Norman Space. Novant is without doubt one of the largest hospital techniques within the southeastern United States together with in North Carolina. It is usually one of the crucial costly hospital techniques in North Carolina, in keeping with the FTC’s administrative criticism.

Beneath the proposed deal, Novant would purchase Lake Norman Regional Medical Heart, which sits 11 miles away from Novant’s Huntersville Medical Heart. Moreover, Novant would purchase different associated belongings from CHS together with Davis Regional Medical Heart (a behavioral well being hospital), a doctor group of 24 physicians employed by Lake Norman Regional Medical Heart, a majority curiosity in an endoscopy middle in Mooresville, and an entity holding a North Carolina certificates of have to construct an ambulatory surgical procedure middle in Mooresville.

The FTC alleges that the proposed cope with CHS would permit Novant to manage almost 65 % of the marketplace for inpatient basic acute care companies (“GAC”) within the Jap Lake Norman Space of North Carolina, which primarily consists of Iredell County and northern Mecklenburg County. Inpatient GAC companies embrace a broad vary of important medical, surgical, and diagnostic companies that require an in a single day hospital keep.

With fewer alternate options for inpatient GAC companies, Novant would have the ability to demand larger charges for its companies, the FTC mentioned. The FTC alleges the proposed acquisition would doubtless improve annual healthcare prices by a number of million {dollars}. These larger prices would then be handed on to sufferers. The deal would additionally scale back Novant’s incentive to compete to draw sufferers by bettering its amenities, service choices, and high quality of care.

The FTC vote to problem the executive criticism and authorize workers to hunt a short lived restraining order and search a preliminary injunction was 3-0. The federal court docket criticism and request for preliminary reduction might be filed within the U.S. District Court docket for the Western District of North Carolina to halt the transaction pending an administrative continuing.   

In November 2023, the FTC joined by the California Legal professional Normal’s workplace, sued to dam John Muir Well being’s proposed $142.5 million deal to accumulate sole possession of San Ramon Regional Medical Heart LLC from present majority proprietor Tenet Healthcare Corp., saying the deal would drive up healthcare prices.

The FTC alleged that the proposed acquisition would eradicate head-to-head competitors between John Muir Well being and close by San Ramon Regional Medical Heart. John Muir and San Ramon Medical function in California’s I-680 hall, which spans Contra Costa and Alameda Counties within the San Francisco Bay Space.

The FTC argues that the deal would permit John Muir to demand larger charges at its two hospitals in addition to San Ramon Medical for inpatient basic acute care companies (GAC), that are a broad vary of important medical, surgical, and diagnostic companies that require an in a single day hospital keep. “The elimination of competitors between John Muir and San Ramon Medical would additionally scale back incentives for these hospitals to put money into high quality enhancements,” the FTC mentioned.