SALT LAKE CITY (ABC4) – The Federal Trade Commission (FTC) has authorized an administrative complaint alleging that the merger between two Utah healthcare systems would eliminate two other healthcare systems in the Wasatch Front region.
The lawsuit was filed in federal court to block the merger between HCA Healthcare and Steward Health Care System. The FTC alleges that this deal would eliminate the second (HCA) and fourth-largest (Steward) healthcare systems on the Wasatch Front — which comprises 80% of Utah’s residents.
Both companies offer a broad range of essential medical and surgical diagnostic and treatment services that require an overnight hospital stay, known as inpatient general acute care services.
“As the second and fourth-largest healthcare systems in the Wasatch Front region of Utah, which surrounds Salt Lake City, HCA Healthcare and Steward Health Care System help to keep costs down for consumers by competing vigorously with each other,” said FTC Bureau of Competition Director Holly Vedova. “The result is lower prices and more innovative services for patients and their families. If these companies merge, this competition will be lost, and Steward will no longer be available to patients as a low-cost provider in this region.”
The complaint also names Steward’s CEO and controlling majority shareholder, Ralph de la Torre.
The complaint also alleges that the acquisition would:
- Reduce the number of healthcare systems offering inpatient general acute care hospital services. In some Utah markets, the reduction would be from three competitors to two, and in another, from four competitors to three.
- Increase market concentration levels significantly. Inpatient general acute care hospital services sold to commercial insurers and their members are already concentrated in each of the geographic markets; and
- Eliminate Steward as a low-cost competitor. This would enable HCA to command even higher reimbursement rates. Commercial insurers are likely to pass on at least a portion of those higher healthcare costs to employers and health plan members in the form of increased premiums, deductibles, co-pays, and other out-of-pocket expenses.
The commission vote in favor of issuing the preliminary injunction was 5 to 0, according to the FTC.
The administrative trial is scheduled to begin on Dec. 13, 2022.