HMH’s acquisition of Englewood blocked by FTC, headed to court

Senior officials and board members at Hackensack Meridian Health and Englewood Health learned Thursday the long-discussed acquisition of Englewood by HMH was being blocked by the Federal Trade Commission.

The FTC, which has to give final approval of all such mergers, said it is filing an administrative complaint to block the deal. The proposed deal will now be settled in court. A court date has been set for next summer.

“We continue to firmly believe that this merger is in the best interest of our patients and the communities at large,” the two systems said in a joint statement.

The FTC disagreed.

Ian Conner, director of the FTC’s Bureau of Competition, said the FTC feels the merged health care system would control three of the six inpatient general acute care hospitals in Bergen County, which would stifle competition.

“This acquisition would give the combined hospital system increased bargaining leverage, likely leading to increased prices,” he said in a statement. “The transaction would also remove the competitive pressures that have driven these hospitals to invest in quality improvements to the benefit of patients.”

It is unclear if the FTC considers hospitals in New York City to be an alternative for Bergen County residents.

Regardless, officials at HMH and Englewood Health said they plan to “vigorously defend” the merger in court, saying residents will benefit in a number of ways, including:

  • Enhancing access to care and improving quality outcomes by building and expanding Englewood’s tertiary care capabilities in cancer care, cardiology, maternal/child health, and other services and ambulatory care facilities throughout the northern New Jersey region, while further expanding and supporting Hackensack University Medical Center’s complex tertiary and quaternary care services.
  • Increasing access to routine, tertiary and quaternary inpatient care, which can be provided and integrated close to home at Hackensack University Medical Center and Englewood Health thus reducing the need for patients to travel for inpatient care.
  • Achieving cost efficiencies and improved affordability of care for patients, payors and our communities.

The FTC said the proposed acquisition would enable HMH to demand higher rates from insurers for the combined entity’s services, which, in turn, may lead to higher insurance premiums, copays, deductibles or other out-of-pocket costs for plan members.

HMH, one of the state’s two large hospitals systems, operates its flagship hospital, Hackensack University Medical Center, in Bergen County — and partially owns Pascack Valley Medical Center. Both are located within 10 miles of Englewood, which is a nonprofit, independent hospital.

The FTC vote to issue the administrative complaint and to authorize staff to seek a temporary restraining order and preliminary injunction was 5-0.

The FTC, in the release, said it issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the FTC that a proceeding is in the public interest. The issuance of the administrative complaint marks the beginning of a proceeding in which the allegations will be tried in a formal hearing before an administrative law judge.

The federal court complaint and request for preliminary relief will be filed in the U.S. District Court for the District of New Jersey to halt the transaction pending an administrative proceeding. The administrative trial is scheduled to begin on June 15, 2021.