Feds sue Novant Health to try to thwart $320 million takeover of 2 NC hospitals
The Federal Trade Commission on Thursday sued to block Novant Health’s $320 million bid to buy two Iredell County hospitals.
The proposed deal involves Lake Norman Regional Medical Center in Mooresville and Davis Regional Medical Center, a behavioral health hospital in Statesville. Both hospitals are north of Charlotte. Community Health Systems, based in Franklin, Tennessee, owns the hospitals.
“There is overwhelming evidence that Novant’s deal with Community Health Systems will be detrimental to patients, including leading to higher out-of-pocket costs for critical health care services,” Henry Liu, director of the FTC’s Bureau of Competition, said in a statement.
Novant Health, in a statement, called the FTC’s position “flawed”
But North Carolina Attorney Gen. Josh Stein said he agrees with the commission.
“Our office appreciates the FTC’s continued commitment to preserving competition in health care in North Carolina,” Stein said in a statement. “We have been investigating alongside the FTC and are continuing to take a close look at this matter.”
Novant Health defends care
In its statement, the Winston-Salem-based hospital system said it “will pursue available legal responses” to the lawsuit.
“We remain confident that Novant Health can bring exceptional care, leading-edge innovation and long-term stability to Lake Norman and Davis Regional Medical Centers,” according to the statement emailed to The Charlotte Observer Thursday.
A spokesperson for Community Health Systems didn’t immediately return a message from the Observer.
FTC: Health care costs would soar
The FTC said Novant operates Huntersville Medical Center 11 miles from Lake Norman Regional and serves more patients than any other hospital in the eastern area of the lake.
Novant also is among the largest hospital systems in the Southeast, FTC officials said. And it is one of the two main hospital systems in the Charlotte market.
“It is also one of the most expensive hospital systems in North Carolina,” according to the FTC’s administrative complaint against the acquisition.
The proposed deal also includes a group of 24 doctors employed by Lake Norman Regional Medical Center; a majority interest in an endoscopy center in Mooresville, and an entity holding a North Carolina certificate of need to build an ambulatory surgery center in Mooresville, according to the FTC.
With the deal, Novant would control nearly 65% of the market for in-patient general acute care services in the eastern Lake Norman area, according to the FTC.
Annual health care costs would likely soar by several million dollars, the FTC said in its complaint.
The commission voted 3-0 to issue an administrative complaint and authorize staff to seek a temporary restraining order and preliminary injunction in federal court against the acquisition.
