- RWJBarnabas Health's proposed deal to acquire Saint Peter's Healthcare System has been put on hold following a temporary restraining order issued by a federal judge in New Jersey this week.
- The two New Jersey providers cannot proceed with the deal until 10 days after a ruling on a preliminary injunction or until a date set by the court, whichever is later, according to the Monday order signed by Judge John Michael Vazquez.
- Without the restraining order, the two systems would have been able to move forward with the deal after Thursday, the order explains.
The Federal Trade Commission has secured two temporary restraining orders this week, putting a pause on two separate healthcare acquisitions in Utah and New Jersey.
The agency is fresh off two victories: Rhode Island’s two largest health systems scrapped plans to merge in February following the FTC’s challenge, and a federal appeals court sided with the FTC in March, blocking another merger in New Jersey.
The FTC alleges that RWJBarnabas Health and Saint Peter's compete head-to-head in New Jersey, particularly in the central part of the state in Middlesex County.
Saint Peter’s hospital is less than one mile away from RWJBarnabas’ flagship hospital, RWJ-New Brunswick. These are the only two hospitals in New Brunswick, one of the largest cities in Middlesex County, the FTC alleges.
The current competition between the two “incentivizes them to keep prices lower and quality of care higher than they would absent this competition,” according to the administrative complaint.
After the acquisition, RWJBarnabas would control 50% of the market for hospital inpatient services in Middlesex County. The two remaining competitors would have substantially less market share, the FTC alleges.
In the case’s next step, a judge will hear from both sides and weigh whether to issue a preliminary injunction to block the deal.
“The stipulated Temporary Restraining Order (TRO) is a standard part of the judicial process in merger challenges and reflects an agreement between the parties and the FTC that the parties will not close their transaction until the court can hold a hearing on and decide the FTC’s request for a preliminary injunction,” RWJBarnabas said in a statement to Healthcare Dive.
A federal judge in Utah also issued a temporary restraining order this week, putting on hold HCA's acquisition of five hospitals from Steward Health Care System.
In that case, the FTC alleges that the acquisition would lessen competition in the region around Salt Lake City while raising prices and lowering the quality of care for patients.
Also this week, the agency voted to launch an investigation into the practices of drug middlemen, pharmacy benefit managers.
These actions come as President Joe Biden's administration has promised to take a tougher stance on healthcare consolidation.