Antitrust Law Daily FTC sues to block New Jersey healthcare system merger
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Thursday, December 3, 2020

FTC sues to block New Jersey healthcare system merger

By Jody Coultas, J.D.

The agency is alleging that the acquisition of Englewood Healthcare by Hackensack Meridian Health would harm competition in the market for inpatient general acute care services.

The FTC has moved to block Hackensack Meridian Health, Inc.’s proposed acquisition of Englewood Healthcare Foundation, according to an announcement made today. If the merger is allowed to continue, according to the FTC, the elimination of competition would lead to higher prices for patients and reduce incentives to improve quality.

Hackensack Meridian Health is the largest healthcare system in New Jersey. In Bergen County, it operates its flagship hospital, Hackensack University Medical Center, and partially owns Pascack Valley Medical Center—both located within 10 miles of Englewood’s hospital. Englewood is a non-profit independent hospital and healthcare network located in northern New Jersey. The merged healthcare system would control three of the six inpatient general acute care hospitals in Bergen County, New Jersey.

The FTC alleges that the proposed acquisition would eliminate the close competition between Hackensack Meridian Health and Englewood in Bergen County and would leave insurers with few alternatives for inpatient general acute care services. Hackensack Meridian Health would be able to demand higher rates from insurers for the combined entity’s services, which, in turn, may lead to higher insurance premiums, co-pays, deductibles, or other out-of-pocket costs for plan members. In addition, the elimination of competition would reduce incentives to improve quality.

The complaint, which will be filed in a federal district court in New Jersey, will seek a temporary restraining order and preliminary injunction to block the merger. The administrative trial is scheduled to begin on June 15, 2021.

"This acquisition would give the combined hospital system increased bargaining leverage, likely leading to increased prices," said Ian Conner, Director of the FTC’s Bureau of Competition. "The transaction would also remove the competitive pressures that have driven these hospitals to invest in quality improvements to the benefit of patients."

Companies: Hackensack Meridian Health, Inc.; Englewood Healthcare Foundation

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