The Federal Trade Commission (FTC) filed a lawsuit to stop Memphis, Tennessee-based Methodist Le Bonheur Healthcare’s $250 million acquisition of two hospitals in the area owned by Tenet Healthcare.
The agency said in the federal lawsuit filed Friday that the acquisition of two Memphis-based hospitals known as Saint Francis would imperil competition in the area.
Competition would dampen for a “broad range of inpatient medical and surgical diagnostic and treatment services that require an overnight hospital stay,” the FTC said in a release Friday. “If the proposed acquisition is consummated, healthcare costs will rise.”
FTC said only four hospital systems provide general services to the area. If the deal goes through, the new health system would control approximately 60% of the Memphis market.
“It’s clear that patients in the Memphis area have benefited from the competitive pressure that Saint Francis brings to bear on Methodist, through lower rates, more options for insurers and patients, and quality improvements,” said Daniel Francis, deputy director of the FTC’s Bureau of Competition, in a statement.
FTC is seeking a preliminary injunction to halt the deal until completion of a trial next year.
This is the latest move by the FTC to combat hospital mergers. Last year, the FTC launched a probe into the effects of health system mergers on prices and healthcare quality.
Methodist and Tenet said in a joint statement they are reviewing the lawsuit and were bewildered by the move.
“We are surprised by the FTC action given the strong support for the transaction by local stakeholders, including leading local health plans, physicians, employers and community leaders,” the statement said.