Winston-Salem, N.C.,-based Novant Health has fired back against a Federal Trade Commission lawsuit that aims to prevent the health system's acquisition of two hospitals from Franklin, Tenn.-based Community Health Systems.
The FTC alleges that the proposed $320 million acquisition of Lake Norman Regional Medical Center in Mooresville and Davis Regional Medical Center in Statesville, N.C., poses a risk of increased prices and diminished incentives for investing in quality and innovative care. The agency also argued that the deal would grant Novant control over nearly 65% of the market for inpatient general acute care services in the Eastern Lake Norman area.
Novant is picking holes in the FTC's claims, arguing that they are "premised on a distorted and artificially narrow view of healthcare competition in the Charlotte area," the health system said in a 37-page opposition to the agency's request for a preliminary injunction.
"For example, the FTC alleges that CHS's lone acute care hospital in North Carolina is the competitive counterweight to Novant in the purported Eastern Lake Norman Area, a geographic construct gerrymandered specifically to exclude Novant's most important competitors. The FTC then bases its case on inaccurate estimates of market shares within that contrived “market,” which it claims make the transaction presumptively anticompetitive."
Novant argues that the FTC has not defined a relevant market that corresponds to commercial realities and cannot prove that the transaction is likely to substantially reduce competition.
"The FTC's 'one-size-fits-all' attack on hospital mergers, echoed by the amicus brief, misses the real-world facts about this transaction: Novant Health's purchase of these hospitals will ultimately benefit quality of care, long-term outcomes and competition," a spokesperson for Novant told Becker's. "Our commitment to purchase is, fundamentally, a commitment to restore services lost over time and to provide new, leading-edge technology that will enhance the clinical capabilities available to the greater Charlotte community."
North Carolina Treasurer Dale Folwell has backed the FTC's lawsuit to block the hospital transaction, but state attorney general Josh Stein — who is running for governor — has remained neutral.
CHS did not immediately respond to Becker's request for comment.
The FTC said it has no further comment on the case.