Dive Brief:

• RWJBarnabas Health said Tuesday it will no longer acquire Saint Peter’s Healthcare System after the Federal Trade Commission sued to block the deal.          
• After considerable deliberation following the FTC’s move, the New Jersey providers have mutually agreed to end the deal, RWJBarnabas said in a statement Tuesday.
• “This difficult decision was not reached lightly,” RWJ CEO Barry Ostrowsky said, noting the deal reached in 2020 received approval from the state’s attorney general. 

Dive Insight:

The scrapped acquisition plan marks another victory for the FTC. 

Rhode Island’s two largest health systems canceled plans to merge in February following an FTC challenge, and a federal appeals court sided with the FTC in March, blocking a separate deal in New Jersey.  

A federal judge in New Jersey put the RWJ deal on hold, issuing a temporary restraining order last week. The FTC also secured a temporary restraining order last week for another acquisition in Utah. 

The FTC alleged RWJBarnabas and Saint Peter’s were head-to-head competitors, primarily in the central part of the state in Middlesex County, where Saint Peter’s hospital is less than a mile from RWJ’s flagship campus, RWJ-New Brunswick.

The current competition between the two “incentivizes them to keep prices lower and quality of care higher than they would absent this competition,” according to the administrative complaint.

The FTC alleged there was “overwhelming evidence” that the acquisition would harm patients and lead to fewer healthcare choices and higher prices.

Cracking down on healthcare consolidation has been a promise of the Biden administration. Last summer, President Joe Biden signed an executive order instructing antitrust regulators to give extra scrutiny to hospital deals and to review and revise merger guidelines to ensure they go unharmed by potential deals.