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Another Merger Bites the Dust: HCA, Steward Abandon Transaction

Analysis  |  By Melanie Blackman  
   June 17, 2022

The FTC continues to crack down on anticompetitive M&A transactions in healthcare.

For the second time this week, the Federal Trade Commission (FTC) has thwarted another M&A transaction, this time between Utah health system competitors HCA Healthcare and Steward Health Care System.

The systems called off the transaction on Friday, only a few weeks after the FTC launched a lawsuit to block the proposed merger.

According to the agency, the deal would have eliminated competition in the Wasatch Front region in Utah, where approximately 80% of the state's residents live.

"Had this transaction been allowed to proceed, it would have combined the second and fourth-largest healthcare systems in Salt Lake City and the Wasatch Front region of Utah, resulting in higher prices, less innovation, and lower quality care for patients," FTC Bureau of Competition director, Holly Vedova, said in a statement released today. "I am glad that patients and healthcare providers will not have to endure any more uncertainty while waiting for courts to rule on the FTC's legal challenges."

Nashville, Tennessee-based HCA Healthcare owns and operates more than 180 hospitals across 21 states and the United Kingdom. The for-profit organization's Mountain Division, called MountainStar Healthcare, currently operates eight hospitals in the region: Brigham City Community Hospital, Cache Valley Hospital, Lakeview Hospital, Lone Peak Hospital, Mountain View Hospital, Ogden Regional Medical Center, St. Mark's Hospital, and Timpanogos Regional Hospital.

In September 2021, HCA Healthcare and Dallas, Texas-based Steward signed a definitive agreement for HCA Healthcare to acquire the operations of all five Steward's hospitals in Utah. The transaction would have included the purchase of the private health system's Davis Hospital, Jordan Valley Medical Center, Jordan Valley Medical Center-West Valley Campus, Mountain Point Medical Center, and Salt Lake Regional Medical Center.

"This transaction, like the RWJBarnabas Health/Saint Peter's transaction that was abandoned two days ago, should never have been proposed in the first place," Vedova said. "This should be a lesson learned to hospital systems all over the country and their counsel: the FTC will not hesitate to take action in enforcing the antitrust laws to protect healthcare consumers who are faced with unlawful hospital consolidation,"

HealthLeaders reached out to HCA Healthcare and Steward with no response.

Related: RWJBarnabas, Saint Peter's Call it Quits on Proposed Merger

Melanie Blackman is a contributing editor for strategy, marketing, and human resources at HealthLeaders, an HCPro brand.

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