- Tenet Healthcare is trying to wrap up a deal to sell its Memphis-area hospitals and affiliated assets, but the move could hit a potential regulatory roadblock.
- The 519-bed Saint Francis Hospital-Memphis and 156-bed Saint Francis Hospital-Bartlett are slated to be sold to Methodist Le Bonheur Healthcare for $350 million. But nearby Baptist Memorial Health Care and Regional One Health have voiced concerns about ramifications of the consolidation on consumers.
- As a result, it is possible the deal could attract closer-than-normal scrutiny from the Federal Trade Commission.
Tenet Healthcare's profitability has been under pressure for years. The Dallas-based for-profit hospital chain has been selling off its underperforming properties as a result.
The sale of Tenet's Memphis, Tennessee-area assets — announced in mid-December — appeared to have wind at its back. The deal, announced in the first part of December, was fairly straightforward. Tenet was to sell the two hospitals, their associated physician practices, most of its outpatient surgery centers and six urgent care clinics for $350 million in cash. But then the other major providers in the region piped up.
If the deal goes through, Baptist Le Bonheur would have the biggest share of inpatient admissions in Memphis, about 53.5%. And that has raised concerns among both Baptist Memorial and Regional One.
"We have not filed any opposition with the Federal Trade Commission," Baptist Memorial spokesperson Ayoka Pond told Healthcare Dive in an email. "However, given the magnitude of this transaction we are reasonably certain the FTC will be reviewing this proposed transaction given the potential negative impact it could have on the consumers in Memphis."
Regional One did not respond to a request seeking comment. However, system officials told the Memphis Business Journal that it was actively considering its options to oppose the deal. "Market consolidation that exceeds 60% could negatively impact the community's healthcare options. It would eliminate choice and potentially lead to service consolidation that would not be of benefit to this community," hospital representatives told the publication.
Whether the FTC closely scrutinizes the sale remains to be seen, as the agency has not been particularly active during the Trump era in regards to reviewing healthcare M&A. However, in recent months it has undertaken reviews of certificates of public advantage, which have shielded some rural providers from antitrust scrutiny. FTC Commissioner Rebecca Kelly Slaughter has also said publicly that the agency needs more resources to review pending deals among providers.