Georgia health systems discard merger plans, averting FTC challenge


Federal Trade Commission (FTC) Definition

Dive Brief:

  • The Federal Trade Commission has closed its investigation of the merger between Atrium Health Navicent and Houston Healthcare System following news the two have abandoned their plans for a deal.
  • FTC staff had recommended commissioners challenge the merger on grounds that it would have led to “significant harm” for area residents and businesses in the form of higher healthcare costs, the FTC alleged. 
  • The tie-up between two of the largest systems in central Georgia would also hamper investment in facilities, technologies and expanded access to services, according to a statement released Wednesday.

Dive Insight:

FTC Acting Chairwoman Rebecca Kelly Slaughter said in the statement, “This is great news for patients in central Georgia.”

When the deal was originally announced, Atrium Health Navicent promised to spend $150 million on Houston over a decade, earmarking the money for routine capital expenditures and strategic growth initiatives, according to a previous review of the transaction by the state attorney general’s office.

After engaging with consultants at Kaufman Hall in 2017, leaders at Houston, an independent system, decided they needed to find a strategic partner to weather long-term challenges and ultimately picked Navicent.

Navicent recently merged with North Carolina-based Atrium Health, formerly known as Carolinas HealthCare System. At the time, the deal gave Atrium a foothold in the state of Georgia.

Healthcare consolidation has continued at a steady clip despite the pandemic, and the FTC will be closely investigating any deal involving close competitors. The agency is seeking to expand its arsenal to block future mergers by researching new theories of harm.

The FTC attempted to block a hospital deal in Philadelphia last year but has since abandoned its challenge after a series of setbacks in court. The judge was not swayed that the consolidation of providers would lead to an increase in prices given the plethora of healthcare options in the area.

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