Hackensack Meridian Health, Englewood Health appeal merger delay
Hackensack Meridian Health and Englewood Health appealed the delay of their proposed deal amid opposition from antitrust authorities.
The Federal Trade Commission sued to block the 16-hospital Hackensack Meridian Health system’s acquisition of the neighboring New Jersey hospital on the grounds that the transaction would likely increase prices and reduce quality. A federal court in New Jersey granted the FTC’s request for a preliminary injunction in early August.
Hackensack and Englewood are appealing that decision, arguing that the district court erred in concurring that the deal would lessen competition and inflate prices.
The FTC’s case relied on hospitals boosting prices for Bergen County, New Jersey, residents, “something hospitals concededly do not and cannot do in their negotiations with health insurers,” the hospitals claim. The hospitals also argue that expert witnesses relied on patients’ willingness to pay rather than what insurers agreed to pay, which indicated no likelihood of price hikes.
Hackensack and Englewood ask the appellate court to review whether the geographic markets were sound, whether the district court misjudged the likelihood of price increases and if the benefits of the acquisition outweighed the costs.
Hackensack declined to comment on the appeal and the FTC did not immediately respond.
Regulators did not find enough offsetting factors to balance the potential anticompetitive effects of combining hospitals that insurers deem substitutes, which typically leads to higher prices and diminishes quality, studies have shown. Hospital prices vary so widely for similar services due to consolidation, policy experts argue.
Hackensack pledged to invest $400 million in Englewood in the definitive agreement. The transaction would increase access, improve quality, boost population health efforts and achieve cost efficiencies, executives said at the time. But efficiencies are seldom reached given the complexity of integration, research shows.