- HCA Healthcare's deal to acquire Steward Health Care System's five Utah hospitals has been put on hold after a federal judge issued a temporary restraining order.
- The two entities would have been able to consummate the deal earlier this week absent the temporary restraining order, which was issued by U.S. District Judge Tena Campbell in Utah on Monday.
- HCA and Steward can’t proceed with the transaction until 10 days following a ruling on a preliminary injunction, or after a date set by the court, whichever is later.
The Federal Trade Commission alleges the merger would minimize competition and ultimately harm patients due to higher prices and lower care quality, according to the complaint filed June 3 in federal court in Utah.
The temporary restraining order maintains the status quo, preserving competition while the case proceeds to the next step.
The court now will weigh whether to issue a preliminary injunction and will hear from both parties in the case before issuing a ruling on the injunction.
HCA already operates six hospitals in Utah's Wasatch Front, the area surrounding Salt Lake City, the same region in which Steward operates five hospitals. HCA is the second-largest provider of hospital services in the region while Steward is No. 4. The two are head-to-head competitors and have facilities in close proximity to one another, which offer many of the same services.
Altogether there are four healthcare systems providing inpatient services in this region, and according to the FTC, an acquisition of the Steward hospitals by HCA would reduce the number of systems offering inpatient services to three systems.
The FTC said competition between HCA and Steward for inclusion in narrow-network health plans is “particularly fierce” as Intermountain, the largest system in the region, typically is excluded from these plans, leaving HCA and Steward to compete more closely with one another.
The FTC argues that competition between the two has resulted in reduced rates charged to insurers, upgraded facilities and improved service offerings.
Ultimately, the transaction would eliminate Steward as the low-cost provider in the region.
HCA will have greater bargaining power as a result of the deal and would command even higher rates from commercial insurers, who are then likely to pass those higher costs on to employers and members in the form of increased premiums, deductibles and copays, the FTC alleges.