The Federal Commerce Fee, joined by the California Legal professional Normal’s workplace, sued to dam John Muir Well being’s proposed $142.5 million deal to amass sole possession of San Ramon Regional Medical Heart LLC from present majority proprietor Tenet Healthcare Corp., saying the deal would drive up healthcare prices.
The Fee issued an administrative criticism and licensed a lawsuit in federal court docket alleging the proposed acquisition would get rid of head-to-head competitors between John Muir Well being and close by San Ramon Regional Medical Heart. John Muir and San Ramon Medical function in California’s I-680 hall, which spans Contra Costa and Alameda Counties within the San Francisco Bay Space.
The FTC argues that the deal would enable John Muir to demand larger charges at its two hospitals in addition to San Ramon Medical for inpatient common acute care providers (GAC), that are a broad vary of important medical, surgical, and diagnostic providers that require an in a single day hospital keep. “The elimination of competitors between John Muir and San Ramon Medical would additionally scale back incentives for these hospitals to put money into high quality enhancements,” the FTC mentioned.
“San Ramon Regional Medical Heart has performed an essential function in making certain Californians within the I-680 hall have entry to high quality, reasonably priced take care of essential well being care providers, comparable to cardiac surgical procedure and childbirth,” mentioned Henry Liu, director of the FTC’s Bureau of Competitors, in an announcement. “John Muir’s acquisition of San Ramon Medical would enhance already excessive well being care prices within the space and threaten to stall high quality enhancements that assist advance take care of all sufferers.”
The FTC and the California Legal professional Normal’s workplace carefully cooperated all through the investigation and can collectively file a criticism in federal district court docket.
John Muir Well being, a nonprofit company headquartered in Walnut Creek, Calif., operates two hospitals that present inpatient GAC providers alongside the I-680 hall. Dallas-based Tenet operates 61 common acute-care hospitals and a whole bunch of outpatient services nationally, together with quite a few services in California.
At present, Tenet operates San Ramon Medical and holds a 51 % curiosity within the medical middle, whereas John Muir owns a 49 % non-operating curiosity in San Ramon Medical. Below the phrases of the proposed deal, John Muir would purchase Tenet’s remaining curiosity in San Ramon Medical and would develop into its sole proprietor and operator.
The criticism alleges that the proposed deal would enable John Muir to regulate greater than 50 % of the marketplace for inpatient GAC providers offered to industrial insurers and their enrollees within the I-680 hall, eliminating competitors between John Muir and San Ramon Medical.
The FTC mentioned that at the moment, San Ramon Medical is a lower-priced competitor in search of to supply inpatient GAC providers within the I-680 hall to enrollees. John Muir’s hospitals are shut rivals to San Ramon Medical by way of each affected person choice and geographic location, in accordance with the criticism. The FTC argues that the proposed acquisition would result in larger insurance coverage premiums, co-pays, deductibles, and different out-of-pocket prices, or decreased advantages for industrial medical insurance enrollees, the criticism alleges.
Along with submitting an administrative criticism, FTC employees can even ask a federal court docket to challenge a brief restraining order and preliminary injunction to forestall John Muir from taking management of San Ramon Medical pending the company’s administrative continuing.
The Fee vote to challenge the executive criticism and authorize employees to hunt a brief restraining order and preliminary injunction was 3-0.
“We’re in court docket at present difficult John Muir Well being’s anticompetitive acquisition of San Ramon Regional Medical Heart, as a result of when healthcare markets illegally consolidate, sufferers pay the worth,” mentioned California Legal professional Normal Rob Bonta, in an announcement. “On the California Division of Justice, making certain that each Californian can entry high quality, reasonably priced care is a high precedence. Aggressive markets assist hold costs decrease. We are going to proceed to struggle to make sure that Bay Space residents – and all Californians – can entry the reasonably priced healthcare they should reside wholesome and completely satisfied lives.”
A information story within the Pleasanton Weekly quotes Mike Thomas, president and CEO of John Muir Well being: ”We’re disenchanted by the FTC’s choice, and are discussing our choices and subsequent steps, together with difficult the choice in court docket. We imagine the proposed acquisition would profit our group, caregivers and sufferers, in addition to John Muir Well being, San Ramon Regional Medical Heart, and Pleasanton Diagnostic Imaging.”
In keeping with the article, “John Muir officers mentioned that the acquisition had been poised to enhance providers and affected person outcomes by extending current packages and practices at John Muir to the San Ramon hospital and investing in it with the purpose of decreasing the probability that sufferers would wish to go away the world for care.”
