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Dive Temporary:
Novant Well being and Group Well being Methods are firing again at regulators’ claims that the proposed $320 million sale of two CHS North Carolina hospitals to Novant would elevate costs and cut back incentives to offer high quality care.
In an courtroom submitting this week, the well being methods argued that the Federal Commerce Fee’s allegations are based mostly on a “distorted and artificially slim view” of the Charlotte, North Carolina-area market that overestimates the hospitals’ aggressive energy.
Regulators sued to dam the sale of CHS’ Lake Norman Regional Medical Heart and Davis Regional Medical Heart to Novant in January. In a memo filed final month, the FTC mentioned the deal would give Novant an “eye-popping” 64% share of the market within the Japanese Lake Norman space within the northern suburbs of Charlotte.
Dive Perception:
The 2 methods are arguing that the FTC’s argument relies on inaccurate estimates of market shares within the area, ignoring different opponents and overstating CHS’ significance.
Nonprofit Novant operates seven acute care hospitals within the Charlotte space, although none in Iredell County, the place the 2 contested hospitals are situated.
In the meantime CHS, a Franklin, Tennessee-based operator with hospitals in 15 states, is without doubt one of the smaller well being methods within the area, the methods argue.
Novant will make wanted investments within the two hospitals, which CHS has lacked the market energy to enhance, in accordance with the submitting. Davis ended hospital providers apart from behavioral healthcare in 2022, and Lake Norman has a “low and declining occupancy charge,” the methods mentioned.
The deal might even decrease prices by higher expense controls and improved high quality when Lake Norman is built-in inside Novant, they mentioned. Regardless of the hospitals’ claims, a rising physique of analysis has proven hospital mergers and acquisitions don’t decrease prices or enhance high quality of care.
The suppliers additionally argue the FTC’s image of competitors within the space is inaccurate. The Japanese Lake Norman space is “gerrymandered” to keep away from a few of Novant’s main opponents, together with Atrium Well being, which can open a brand new hospital within the space subsequent yr, the well being methods mentioned.
The brand new facility, Atrium Lake Norman, would serve almost as many sufferers as CHS’ Lake Norman on a mean day, even with solely 30 inpatient beds, in accordance with the submitting. The methods additionally listed opponents like CaroMont Well being and Iredell Well being close by.
The opposition from Novant and CHS comes as North Carolina Treasurer Dale Folwell backed the FTC’s lawsuit. In an amicus temporary filed this week, Folwell argued the acquisition would enhance prices for the state’s well being plan and for taxpayers — an issue that already threatens beneficiaries’ entry to care.
“If the costs rise additional nonetheless, the Plan might go right into a demise spiral, the place the younger and wholesome depart the plan, which raises prices and premiums for many who stay, inflicting much more members to go away,” the treasurer wrote.
