The Federal Trade Commission Bureau of Competition issued a statement noting that Utah healthcare competitors HCA Healthcare and Steward Health Care System have decided to abandon their proposed merger, which the FTC opposed.
In early June the FTC said it would mount a legal challenge to HCA Healthcare’s plans to buy five Utah hospitals from Steward, saying the proposal would eliminate too much competition in Salt Lake City and surrounding areas.
In a June 2 statement, FTC officials said 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 percent of Utah’s population. HCA’s operations already rank second in market share in the Wasatch Front region.
Announced last September, HCA’s proposed acquisition would have grown 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 had set the stage for a trial starting in mid-December.
“For the second time in a week, parties who proposed an anticompetitive hospital merger have called their deal off after the FTC filed a complaint to block the deal, said FTC Bureau of Competition Director Holly Vedova 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. 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. Had this transaction been allowed to proceed, it would have combined the second and fourth largest healthcare systems in Salt Lake City and the Wasatch Front region of Utah, resulting in higher prices, less innovation, and lower quality care for patients. 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.”
