Merger between Hackensack and Englewood hospital threatened, federal government seeks to block deal

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The Federal Trade Commission said Thursday it is seeking to block the acquisition of Englewood Health by Hackensack Meridian Health, arguing the merger would eliminate competition and lead to increased medical costs for patients.

The FTC has filed an administrative complaint and plans to take legal action in federal court as the merger would allow Hackensack Meridian to demand higher rates from insurers, which could lead to higher premiums, co-payments , deductibles and other costs to patients, the agency said. .

“The transaction would also remove competitive pressures that have driven these hospitals to invest in quality improvements to benefit patients,” Ian Conner, director of the FTC’s Competition Bureau, said in a statement.

In a joint statement, executives at Hackensack Meridian and Englewood said they would “vigorously defend” the merger in court.

“We continue to firmly believe that this merger is in the best interest of our patients and communities at large,” the statement said.

Merger agreement announced in October 2019 continued a trend of hospital consolidation and the unprecedented growth of Hackensack University Medical Center from a regional hospital to one of New Jersey’s most dominant healthcare providers.

One in three dollars spent on health care in the United States goes to hospital care.

But, so far, rising prices and hospital profit margins have attracted less attention from lawmakers and regulators than drug prices, as most people have insurance coverage that limits their out-of-pocket payments. . The main effect of rising hospital prices is rising insurance premiums, which are paid by employers and consumers.

Blocking the merger would affect two large local employers and put an end to major improvement projects at Englewood.

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A memo sent to Englewood employees on Thursday said the FTC’s challenge was disappointing and management was committed to fighting it in court.

Hackensack Meridian has pledged to invest $ 400 million in new operating rooms, expanded heart facilities and outpatient sites for Englewood doctors. Hackensack Meridian had also agreed to take over Englewood’s outstanding debt of $ 182 million.

Hackensack Meridian operates its flagship hospital in Hackensack and partially owns the Pascack Valley Medical Center, both located within 10 miles of Englewood Hospital.

If the merger goes through, only a dozen of the state’s 71 hospitals would remain independent from larger health systems, including Holy Name Medical Center in Teaneck and Valley Health, owner of The Valley Hospital in Ridgewood.

The FTC voted 5-0 to seek a temporary injunction. The administrative trial is scheduled to begin on June 15, 2021, according to the agency.

The 541-bed Englewood Hospital had the second-lowest occupancy rate in Bergen County in 2018 with 37% of its beds occupied, on average. Hackensack had the highest rate, at 78%, according to data from the state’s Department of Health.

Englewood’s network of 100 ambulatory care sites in six counties would also be part of Hackensack Meridian’s network. Many doctors are already affiliated with the two hospitals.

At the time of the merger announcement, Englewood employed 3,400 physicians and had 1,100 affiliated physicians. No dismissal was planned.

The president of the nurses’ union at the two hospitals said Thursday that she welcomed the “transparency” that would come with the judicial review.

“This action by the Federal Trade Commission should provide the oversight needed for this proposed merger to ensure that patients, the community and workers in Englewood are not affected,” said Debbie White, president of the health professionals union. and Allied employees, who represent 800 nurses at Englewood Hospital.

In their statement on Thursday, the two hospitals said the merger would benefit residents of Bergen County and beyond by expanding cancer care, cardiology, maternal and child health and other services. Englewood and “delivering cost savings and increased accessibility of care for patients, payers and our communities.”

Editor Lindy Washburn contributed to this article.

Check back for updates to this story.

Scott Fallon covers the environment for NorthJersey.com. To get unlimited access to the latest news on how the New Jersey environment affects your health and well-being, please register or activate your digital account today.

E-mail: [email protected]

Twitter: @newsfallon



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