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John Muir Health calls off plans to acquire stake in California Hospital to end FTC litigation

by John R. Fischer, Senior Reporter | December 22, 2023
Business Affairs
San Ramon Regional Medical Center (Photo courtesy of JMH)
Facing litigation from the Federal Trade Commission, John Muir Health has ended its plans to acquire the remaining stake in its jointly-owned San Ramon Regional Medical Center (SRRMC) from Tenet Healthcare for $142.5 million.

In its announcement of the termination, JMH, a not-for-profit healthcare organization east of San Francisco that has owned a 49% interest in SRRMC since 2013 and announced in January that it was seeking to acquire the other 51%, said that the time and money required to litigate is better spent on other initiatives.

“Both Tenet and JMH remain very disappointed in the FTC's decision and strongly disagree with the assumptions and conclusions that were reached in their court submission. We maintain our shared belief that the proposed transaction would have provided substantial benefits for patients and the community,” it said.

The FTC filed a suit to block the deal in November, saying it would raise hospital costs for critical services like heart surgery, spinal surgery, and maternity care, and would eliminate improvements made by competition that benefit patients.

Following the news of the deal’s cancellation, the FTC and the state of California moved to dismiss their federal court case, and the FTC also dismissed its administrative challenge.

“Now that this transaction is terminated, John Muir and Tenet’s San Ramon Regional Medical Center can continue competing head-to-head to offer high-quality care at the best prices for Californians in the I-680 corridor,” said Bureau of Competition director Henry Liu in a statement.

A 123-bed hospital, SRRMC would have been the fourth provider under JMH, which runs the 554-bed John Muir Health Walnut Creek Medical Center, 244-bed John Muir Health Concord Medical Center, and a 73-bed psychiatric hospital in Concord.

JMH planned to make investments in SRRMC’s facilities and enhance services to increase the number of patients seeking care there. It also was going to extend quality enhancement and population health programs and its nonprofit community benefit programs within the communities the hospital serves, and integrate SRRMC onto its version of the Epic electronic health record platform.

Instead, SRRMC and associated businesses will continue to operate under the current joint venture structure between JMH and Tenet. Tenet will continue overseeing hospital operations, and SRRMC will continue to provide care in San Ramon, Dublin, Pleasanton, and surrounding areas.

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