business

FTC, in turnabout, takes a closer look at hospital mergers

The organization is asserting itself after more than a decade of standing on the sidelines.

By Victoria Stagg Elliott — Posted April 9, 2012

Print  |   Email  |   Respond  |   Reprints  |   Like Facebook  |   Share Twitter  |   Tweet Linkedin

The number of hospital mergers and acquisitions has grown, and that increase has prompted greater regulatory scrutiny of such deals.

For example, the Federal Trade Commission on March 28 ruled that ProMedica Health System in Ohio and Michigan had to divest itself of the recently acquired St. Luke’s Hospital in Maumee, Ohio. At the request of the FTC, the Solicitor General of the U.S. petitioned the U.S. Supreme Court on March 23, asking it to review lower court decisions related to the agency’s attempts to block the purchase of Palmyra Park Hospital in Albany, Ga., by Phoebe Putney Health System, which has facilities throughout that state.

The agency also filed an administrative complaint on Nov. 18, 2011, charging that the Peoria, Ill.-based OSF Healthcare System’s planned acquisition of Rockford Health System, also in Illinois, would reduce competition between hospitals and primary care physicians.

The FTC and the Dept. of Justice had some success in the 1980s winning hospital merger cases on the basis of violations to antitrust laws. They had a string of losses in the 1990s, and then stopped filing these cases.

“Both the FTC and the DOJ left the hospital merger business and determined that these cases were unwinnable in federal district court,” said Matt Reilly, assistant director of the FTC’s Bureau of Competition.

The agencies changed their strategies and gathered evidence that a lack of competition meant even nonprofit institutions would raise prices. They started challenging hospitals mergers again in 2008.

The majority of hospital mergers and acquisitions occur with no action by the agencies. Unlikely to trigger action are deals between parts of the health system that do not compete directly, such as hospitals and home health care or physician practices of different specialties. These arrangements have become more common as the health system seeks to form accountable care organizations and deal with other aspects of reform.

“We are much less concerned about vertical arrangements than close competitors merging,” Reilly said.

Eighty-six hospital merger or acquisition deals were completed in 2011, according to data published Feb. 28 by Irving Levin Associates. That was the highest number in the past 10 years.

At the same time, more physicians are working for hospitals. The number of physicians and dentists with full-time employment at community hospitals went up from 62,152 in 1998 to 91,282 in 2010, according to the American Hospital Assn.

Back to top


ADVERTISEMENT

ADVERTISE HERE


Featured
Read story

Confronting bias against obese patients

Medical educators are starting to raise awareness about how weight-related stigma can impair patient-physician communication and the treatment of obesity. Read story


Read story

Goodbye

American Medical News is ceasing publication after 55 years of serving physicians by keeping them informed of their rapidly changing profession. Read story


Read story

Policing medical practice employees after work

Doctors can try to regulate staff actions outside the office, but they must watch what they try to stamp out and how they do it. Read story


Read story

Diabetes prevention: Set on a course for lifestyle change

The YMCA's evidence-based program is helping prediabetic patients eat right, get active and lose weight. Read story


Read story

Medicaid's muddled preventive care picture

The health system reform law promises no-cost coverage of a lengthy list of screenings and other prevention services, but some beneficiaries still might miss out. Read story


Read story

How to get tax breaks for your medical practice

Federal, state and local governments offer doctors incentives because practices are recognized as economic engines. But physicians must know how and where to find them. Read story


Read story

Advance pay ACOs: A down payment on Medicare's future

Accountable care organizations that pay doctors up-front bring practice improvements, but it's unclear yet if program actuaries will see a return on investment. Read story


Read story

Physician liability: Your team, your legal risk

When health care team members drop the ball, it's often doctors who end up in court. How can physicians improve such care and avoid risks? Read story

  • Stay informed
  • Twitter
  • Facebook
  • RSS
  • LinkedIn