Dive Temporary:
- Novant Health and Neighborhood Health Techniques are firing again at regulators’ claims that the proposed $320 million sale of two CHS North Carolina hospitals to Novant would increase costs and cut back incentives to offer high quality care.
- In an court filing this week, the Health techniques argued that the Federal Commerce Fee’s allegations are primarily based on a “distorted and artificially slender view” of the Charlotte, North Carolina–space market that overestimates the hospitals’ aggressive energy.
- Regulators sued to dam the sale of CHS’ Lake Norman Regional Medical Heart and Davis Regional Medical Heart to Novant in January. In a memo filed final month, the FTC mentioned the deal would give Novant an “eye-popping” 64% share of the market within the Jap Lake Norman space within the northern suburbs of Charlotte.
Dive Perception:
The 2 techniques are arguing that the FTC’s argument is predicated on inaccurate estimates of market shares within the area, ignoring different opponents and overstating CHS’ significance.
Nonprofit Novant operates seven acute care hospitals within the Charlotte space, although none in Iredell County, the place the 2 contested hospitals are situated.
In the meantime CHS, a Franklin, Tennessee-based operator with hospitals in 15 states, is among the smaller Health techniques within the area, the techniques argue.
Novant will make wanted investments within the two hospitals, which CHS has lacked the market energy to enhance, based on the submitting. Davis ended hospital companies apart from behavioral healthcare in 2022, and Lake Norman has a “low and declining occupancy price,” the techniques mentioned.
The deal might even decrease prices by means of higher expense controls and improved high quality when Lake Norman is built-in inside Novant, they mentioned. Regardless of the hospitals’ claims, a rising physique of analysis has proven hospital mergers and acquisitions don’t decrease prices or enhance high quality of care.
The suppliers additionally argue the FTC’s image of competitors within the space is inaccurate. The Jap Lake Norman space is “gerrymandered” to keep away from a few of Novant’s main opponents, together with Atrium Health, which can Health-breaks-ground-on-hospital-that-will-provide-critical-care-to-north-mecklenburg-county”>open a brand new hospital within the space subsequent 12 months, the Health techniques mentioned.
The brand new facility, Atrium Lake Norman, would serve almost as many sufferers as CHS’ Lake Norman on a mean day, even with solely 30 inpatient beds, based on the submitting. The techniques additionally listed opponents like CaroMont Health and Iredell Health close by.
The opposition from Novant and CHS comes as North Carolina Treasurer Dale Folwell backed the FTC’s lawsuit. In an amicus brief filed this week, Folwell argued the acquisition would improve prices for the state’s Health plan and for taxpayers — an issue that already threatens beneficiaries’ entry to care.
“If the costs rise additional nonetheless, the Plan might go right into a demise spiral, the place the younger and wholesome go away the plan, which raises prices and premiums for individuals who stay, inflicting much more members to depart,” the treasurer wrote.
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