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FTC and RI Attorney General file suit to stop Lifespan and Care New England merger

by John R. Fischer, Senior Reporter | February 23, 2022
Business Affairs
The FTC and RI Attorney General have filed a suit to stop Care New England and Lifespan Corporation from merging
The U.S. Federal Trade Commission and the Rhode Island Attorney General are taking legal action to prevent the state's two largest healthcare systems from merging together.

Lifespan Corporation and Care New England Health System inked a deal in March of last year to merge into an integrated health system made up of eight hospitals across the state. Together, the two believe their complementary medical specialties and biomedical research would offer patients more options for protocol-driven therapies, eliminate health disparities and improve access to women’s health.

Backing the deal was Brown University’s Warren Alpert Medical School, which said it would increase economic opportunities and protect patients and community hospitals. It agreed to contribute $125 million toward the new entity.

But critics say the merger would decrease competition and possibly increase overall healthcare costs. In a vote, the agency unanimously opposed the deal out of concern that it would create a “healthcare conglomerate with outsized power” and said that it plans to file a lawsuit to block the deal, according to Reuters.

"This proposed merger is a bad deal for patients who are likely to see higher hospital bills, lower quality of care, and fewer cutting-edge medical services," said FTC Bureau of Competition Director Holly Vedova in a statement.

Joining the lawsuit is State Attorney General Peter Neronha, who also rejected the proposal, reported WPRI. “Rather than putting the healthcare systems on stronger financial footing, the proposed merger would leave Rhode Island’s healthcare system in even greater financial peril,” he wrote in his 150-page decision.

The deal would give the newly combined hospital system roughly 70% to 80% of treatments in the Rhode Island market that require hospital stays, as well as an equally high share of the market for in-patient behavioral health services, according to the FTC. It plans to use this as its main complaint in court. Neronha added that the biggest hospital groups in Massachusetts and Connecticut, Mass General Brigham and Yale New Haven Health, respectively, already control less than one-third of inpatient care in their states.

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