HACKENSACK, N.J. — The Federal Trade Commission (FTC) has filed an administrative complaint in federal court to block Hackensack Meridian Health’s plans to merge with Englewood Health.
According to a news release from the FTC, the Commission voted unanimously to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction. The complaint and request for preliminary relief will be filed in the U.S. District Court for the District of New Jersey to stop the transaction pending an administrative proceeding. The trial is slated to begin on Tuesday, June 15, 2021.
In a press release sent Thursday, the FTC contends that the acquisition would result in higher costs and a decline in the quality of healthcare. The commission also counters that Hackensack Meridian Health’s ability to demand higher rates from insurers could lead to higher insurance premiums, co-pays, deductibles, or other out-of-pocket costs for plan members. The commission argues that eliminating competition between the entities would reduce incentives to improve quality.
The Board of Trustees for both hospitals signed an agreement to merge on October 15, 2019. In that time, the contract underwent a rigorous review by the New Jersey Office of the Attorney General in addition to the New Jersey Department of Health and the Federal Trade Commission.
“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.”
As part of the contract, Hackensack Meridian Health — the state’s largest health care system — would commit a $400 million capital investment in Englewood Health to further position the 130-year-old hospital as a tertiary hub in the bedroom community of New York City, focusing on cardiovascular care, oncology, robotic surgery, neurosciences, women’s health and neonatal intensive care, stroke care, thoracic surgery and an ambulatory care network.
On Thursday, the Boards of Trustees from both hospitals announced their displeasure with the Commission’s decision to challenge the merger. In a joint statement from both hospitals, health officials stood by their decision to merge, believing the acquisition is in the “best interest of their patients and the communities at large:
“We are very disappointed to learn that the Federal Trade Commission has voted to challenge the proposed merger between Hackensack Meridian Health and Englewood Health. The decision to pursue the merger was made in September 2019 when both organizations signed a definitive agreement to merge. 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, which include, but are not limited to:
- Investing in programs and services that aim to support the well-being of community members and link them to care across Hackensack Meridian Health;
- Enhancing access to care and improving quality outcomes by building and expanding Englewood’s tertiary care capabilities in cancer care, cardiology, maternal/child health, and other services and ambulatory care facilities throughout the northern New Jersey region, while further expanding and supporting Hackensack University Medical Center’s complex tertiary and quaternary care services;
- Increasing access to routine, tertiary and quaternary inpatient care, which can be provided and integrated close to home at Hackensack University Medical Center and Englewood Health thus reducing the need for patients to travel for inpatient care;
- Achieving cost efficiencies and improved affordability of care for patients, payors and our communities.”
According to the complaint filed by the Commission, the new healthcare system would control three of the six inpatient general acute care hospitals in Bergen County. Eliminating the competition between the two hospitals would “leave insurers with few alternatives for inpatient general acute care services, which encompass a broad range of inpatient medical and surgical diagnostic and treatment services that require an overnight hospital stay.”
Last fall, health care officials at Englewood Health said the merger would result in the greatest access to care in northern New Jersey and throughout the Garden State, and that, over the past decade, significant investments have been made in their facilities and technology from which their patients are benefiting, and intended to invest in further advancements.