Feds blocking sale of N.J. hospital to Hackensack Meridian, saying it would drive up consumer prices
Taken from NJ.com
By Susan K. Livio | NJ Advance Media for NJ.com
December 4, 2020
The Federal Trade Commission announced Thursday it intends to block the proposed the sale of Englewood Hospital and Medical Center to Hackensack Meridian Health because the hospital chain would monopolize the Bergen County market and drive up prices.
Hackensack Meridian Health, one of the largest hospital and health care chains in New Jersey, announced last year it had inked a deal to acquire Englewood, one of the last remaining independent community hospitals in the state.
But mergers and acquisitions need state and federal government approval, although they are seldom blocked.
Hackensack Meridian Health operates its flagship hospital, Hackensack University Medical Center, and partially owns Pascack Valley Medical Center.
In an press release Thursday afternoon, Ian Conner, director of the FTC’s Bureau of Competition said the commission was filing a restraining order against the merger because Hackensack Meridian would control three of the six acute-care hospitals in Bergen County.
“This acquisition would give the combined hospital system increased bargaining leverage, likely leading to increased prices,” Conner’s statement said. “The transaction would also remove the competitive pressures that have driven these hospitals to invest in quality improvements to the benefit of patients.”
“In addition,” the statement said, “the elimination of competition would reduce incentives to improve quality.”
A statement from the Boards of Trustees and leadership teams of Hackensack Meridian Health and Englewood Health expressed disappointment in the FTC’s actions.
“The decision to pursue the merger was made in September 2019 when both organizations signed a definitive agreement to merge,” according to the statement. “We continue to firmly believe that this merger is in the best interest of our patients and the communities at large.”
“As a result, we plan to vigorously defend the merger in court, which will give us the opportunity to further demonstrate the benefits Hackensack Meridian Health and Englewood Health will achieve together,” the statement said.
Contrary to the FTC’s claims, the merger will “achieve cost efficiencies and improved affordability of care,” the hospitals’ statement said. Englewood will expand cancer, cardiac and maternal and child health care and add outpatient facilities in the region, the statement said.
A trial is scheduled in the matter on June 15, 2021, according to the announcement.
Englewood had been searching for a partner for two years before announcing the deal with Hackensack last year. It faces tough odds as nearly all 71 hospitals in New Jersey are part of a chain that can share costs and demand competitive rates with employers and insurance companies.
Acquiring Englewood would give Hackensack Meridian control of 13 acute-care hospitals in eight counties across the state.