FTC Filing Suit Over HCA-Steward Deal in Utah

The Federal Trade Commission has approved a legal challenge to HCA Healthcare Inc.’s plans to buy five Utah hospitals from Steward Health Care System, saying the proposal would eliminate too much competition in Salt Lake City and surrounding areas.

In a June 2 statement, FTC officials contend that the planned purchase by Nashville-based HCA would take out the fourth-largest competitor for inpatient acute care in the region home to about 80% of Utah’s population. HCA’s operations already rank second in market share in the Wasatch Front region.

“HCA Healthcare and Steward Health Care System help to keep costs down for consumers by competing vigorously with each other,” FTC Bureau of Competition Director Holly Vedova said. “The result is lower prices and more innovative services for patients and their families. If these companies merge, this competition will be lost, and Steward will no longer be available to patients as a low-cost provider in this region.”

Announced last September, HCA’s proposed acquisition would grow its Mountain Division to 16 hospitals in Utah, Idaho and Alaska while giving Steward capital to invest in its operations elsewhere. Dallas-headquartered Steward, which today runs 44 hospitals, had a month earlier completed its purchase of five Tenet Healthcare Corp. hospitals in South Florida.

Executives of both HCA and Steward Utah said they are disappointed by the FTC’s move – which sets the stage for a trial starting in mid-December – and added that they are looking into possible next steps.

“We continue to believe that this combination would benefit patients, most importantly, as well as payers and providers while improving competition in Utah’s healthcare marketplace,” HCA officials said in a statement. “By enhancing competition among healthcare providers and increasing efficiency in the delivery of care, we believe HCA Healthcare’s commitment to Utah would provide patients with greater continuity of care, as well as improved access to trusted healthcare providers.”

In their statement, Steward officials said the federal agency “has misread the pro-competitive potential of this transaction” in a market where Salt Lake City-based Intermountain Healthcare is the top player and said its analysis has focused too much on inpatient care while not accounting for patients’ migration to outpatient settings.

“As such, we will continue to advocate strongly for this sale that would not only support continued investment, but also expand care options for communities across the state of Utah, driving down healthcare costs and continuing to increase quality,” Steward’s statement read. “Steward Health Care is committed to providing patient-centered, high quality health care and believes the transaction would bring increased access and improved competition to this market.”