Dive Brief:
- The Federal Trade Commission is urging North Carolina lawmakers to rethink a bill that would shield UNC Health from antitrust scrutiny for mergers.
- In a letter to members of the North Carolina House Health Committee, the agency argued the bill could allow acquisitions and collaborations that “reduce competition among healthcare providers and lead to patient harm in the form of higher healthcare costs, lower quality, reduced innovation and reduced access to care, as well as depressed wages for hospital employees.”
- North Carolina Senate Bill 743 passed in the state’s Senate about a month ago, and is currently under consideration in the House. It would allow the UNC’s board to enter “cooperative agreements with any other entity for the provision of healthcare, including the acquisition, allocation, sharing or joint operation of hospitals or any other healthcare facilities or healthcare provider, without regard to their effect on market competition.”
Dive Insight:
The bill’s sponsor previously told local media that it could give the nonprofit, state-owned system the chance to save rural hospitals. Rural hospitals have struggled financially in the past decade, with more than 150 shutting down or cutting many of their services since 2010.
But the FTC argued that deals that don’t hinder competition are allowed under antitrust law, and that the purchase of a failing hospital was unlikely to add a competitive advantage.
“FTC staff is concerned that S-743 would encourage precisely the types of agreements among competitors that likely would not pass muster under the antitrust laws — mergers and conduct that would reduce competition, create or entrench monopolies, raise prices, reduce quality and provide few or no benefits to patients, employers or workers,” the agency wrote.
The regulator has previously warned states about the risks of lax antitrust enforcement. Last year, the FTC published a report on Certificates of Public Advantage, or COPAs, arrangements that protect hospital mergers from federal antitrust scrutiny in exchange for prolonged state oversight. In the paper, the agency said COPAs cause higher prices, lower quality and restricted wage growth for workers.
In 2020, the FTC sent a letter to Texas regulators urging it to deny a merger between Hendrick Health System and its only competitor in rural West Texas. That deal closed about a month later.
It also sent letters to lawmakers in Alabama and New York about proposed healthcare bills that the agency argued would allow anticompetitive behavior and harm consumers.
