State AGs Investigate Hospital Mergers for Antitrust Issues
Ten state AGs are actively investigating hospital mergers for potential antitrust violations.
Why it matters: These investigations can affect compliance and oversight obligations for GCs handling healthcare deals.
- 10 AGs, including California, are focusing on potential antitrust issues in hospital mergers.
- Yale reports mergers led to 6%-65% cost increases in healthcare services.
- Connecticut AG set conditions on acquisitions by Hartford Healthcare to prevent anticompetitive actions.
- FTC blocked HCA's acquisition over antitrust concerns in 2022.
State attorneys general from 10 states, including California and New Jersey, are currently investigating hospital mergers to determine if they violate antitrust laws. These probes aim to assess the impact of such mergers on competition, costs, and access to healthcare services. The growing focus on antitrust issues in healthcare is shaping new legal and compliance strategies.
A study by Yale Health Care Affordability Lab documented significant increases in healthcare costs—ranging from 6% to 65%—following past hospital mergers. This cost escalation affects both merged entities and their local healthcare markets, potentially increasing legal obligations for ensuring fair competition.
Axios reported that in Utah, 61.7% of hospitals are under single ownership, raising antitrust concerns. This led the FTC to block a significant merger in 2022 involving HCA Healthcare and five Steward hospitals, highlighting the legal scrutiny on similar transactions.
Connecticut Attorney General William Tong has also intervened in Hartford Healthcare's bid to acquire Manchester Memorial and Rockville General hospitals, imposing conditions to guard against anticompetitive risks, such as regulatory oversight on reimbursement rates and ensuring physician independence.
Legal teams in healthcare must now remain vigilant about regulatory changes, especially after November's federal Request for Information, reflecting state AGs' broader interest in private equity's role in healthcare consolidation.
Yes, but: While state AGs are intensifying scrutiny, no mergers have yet been blocked, allowing some flexibility.
What's next: Outcomes from these investigations will likely influence future regulatory approaches to healthcare mergers.