UPDATE: State AG joins FTC in opposing Penn State Hershey-PinnacleHealth merger
The Federal Trade Commission and Pennsylvania Attorney General Kathleen G. Kane announced today they are taking legal action to block the proposed merger of the two largest health systems in the Harrisburg area.
The FTC alleges that the combination of Penn State Hershey and PinnacleHealth System would substantially reduce competition in the area surrounding Harrisburg, which includes Dauphin, Cumberland, Perry and Lebanon Counties.
The FTC reviews mergers to determine whether the combination of companies will lead to reduced competition and increased prices in the marketplace
It determined that by merging, the health systems would control approximately 64 percent of the Harrisburg-area market, which would likely lead to increased health care costs and reduced quality of care for more than 500,000 local residents and patients.
The FTC will seek a temporary restraining order and a preliminary injunction in federal court to prevent the health systems from merging.
The Pennsylvania Office of Attorney General will join them in the complaint, which will be filed tomorrow in federal court in Harrisburg.
The FTC files such complaints when it has “reason to believe” that the law has been or is being violated and that proceeding is in the best interest of the public.
According to the release, the administrative trial is scheduled to begin May 17, 2016.
FTC votes to seek a temporary restraining order and preliminary injunction in federal court were both 4-0.
According to a news release this morning from Penn State Hershey, both health systems received notice from the Federal Trade Commission that it intends to oppose the integration.
In a statement, the health systems said their integration would be consistent with the goals of the Affordable Care Act, because it would provide the depth of services needed for distinct population health management at the lowest possible cost.
“Over the next several days our respective boards and leadership teams, with guidance from legal counsel, will carefully examine our options in continuing to advocate for our partnership,” Penn State Hershey and PinnacleHealth released in a joint statement.
The union of Penn State Hershey and PinnacleHealth represents what would be one of the biggest health care mergers in the midstate.
The health systems first announced plans to integrate in 2014.