Attorney General Bonta Combats Anticompetitive Hospital Consolidations, Fights for Affordable and Accessible Healthcare

OAKLAND – California Attorney General Rob Bonta and Pennsylvania Attorney General Josh Shapiro today led a multistate coalition in urging the U.S. Court of Appeals for the Third Circuit to ensure the availability of affordable and accessible healthcare by protecting competition in local healthcare markets. The coalition of attorneys general filed an amicus brief in Federal Trade Commission v. Hackensack Memorial Hospital and Englewood Healthcare Foundation, asking the Court to affirm a district court decision to halt the merger of competing hospital systems in New Jersey under federal antitrust law.

“In California, we’ve seen firsthand the effects of a large non-profit healthcare system’s anticompetitive practices,” said Attorney General Bonta. “In our settlement with Sutter Health, we were able to ensure increased transparency and end practices that decrease the accessibility and affordability of healthcare. However, we look to federal agencies and federal antitrust law to prevent potential anticompetitive mergers of for-profit hospitals and of other providers. With COVID-19 continuing to impact communities across the country, affordable and accessible healthcare is more important than ever. We have to get this right.”

Under California law, any transaction involving the sale or transfer of control of a nonprofit hospital must secure the approval of the Attorney General. The Attorney General reviews the proposed transaction, and determines whether it is in the public interest and whether it may impact the accessibility and availability of healthcare services in the affected communities. Mergers involving for-profit hospitals fall outside the scope of state law. Instead, California depends on federal antitrust law to address these mergers. It is therefore critical that courts across the country properly construe federal antitrust laws so federal authorities and states are empowered to combat such anticompetitive mergers and maintain vibrant, competitive healthcare markets.

On August 4, 2021, the U.S. District Court for the District of New Jersey granted the Federal Trade Commission’s request for a preliminary injunction to halt Englewood Healthcare Foundation’s acquisition of Hackensack Memorial Hospital, a hospital focused on community care in Bergen County, New Jersey. In its decision, the district court concluded that the merger would result in anticompetitive effects like higher prices and lower-quality care, without any extraordinary efficiencies to offset those harms.

In today’s brief, the coalition argues that states have seen a wave of hospital consolidation, resulting in large healthcare systems with substantial market power and the ability to wield it to the detriment of insurers and patients. According to the brief, hospitals facing less competition have the ability to charge higher prices without providing improvements to the efficiency or quality of care. The coalition also explained that anticompetitive mergers can impose other harms, including reduced employment, a smaller tax base, and a reduction in services.

In filing today’s amicus brief, Attorney General Bonta and Attorney General Shapiro are joined by the attorneys general of Colorado, Connecticut, Delaware, Guam, Idaho, Illinois,  Indiana, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New Mexico, New York, Nevada, North Carolina, North Dakota, Oregon, Rhode Island, Virginia, Washington, Wisconsin, and the District of Columbia.

A copy of the brief is available here.