Healthcare Providers and Insurers: FTC Approach to Provider Mergers and Acquisitions

Summary

This practice note explains how antitrust enforcers, primarily the Federal Trade Commission (FTC), analyze healthcare-provider mergers, including hospital, outpatient, and physician-group mergers. After federal and state antitrust enforcers lost seven straight hospital-merger challenges in the 1990s, which put their hospital-enforcement approach in doubt, the FTC conducted a series of hospital merger retrospective studies that analyzed the competitive effects of several mergers. As a result of one of those studies, the FTC successfully challenged in its administrative court the consummated merger of Evanston Northwestern Healthcare and Highland Park Hospital. Since then, the FTC has won every fully litigated challenge to block or unwind a hospital and other healthcare-provider merger, including several recent cases at the circuit court level. Additionally, in several non-litigated enforcement actions, the FTC has required remedies to approve the merger.