NJ Hospitals Merger Blocked by Court

A federal appeals court has blocked the planned merger between Hackensack Meridian Health and Englewood Health. Tuesday’s decision by the Third Circuit Court of Appeals officially ends the NJ hospitals’ plans to merge.

The four-judge panel upheld the FTC’s injunction and the initial ruling last August that granted it. HMH and Englewood, which would have become its 13th acute-care facility, agreed to merge in October 2019. However, the FTC cited competition issues in unanimously voting to block the union. While both systems argued that there are NJ hospitals in numerous health systems, two courts sided with the FTC.

Judge D. Michael Fisher noted that “Prices would undoubtedly increase, as evidence has shown” with HMH’s previous mergers. An expert at the FTC estimated $31M in healthcare price increases if the NJ hospitals groups were to merge. The panel reasoned that Englewood wouldn’t try to outperform Hackensack University Medical Center if they were in the same group. As Englewood currently does better with many measures, patients could suffer. HMH’s history also suggests that rates would indeed rise.

Hackensack Meridian Health’s HUMC and Pascack Valley Medical Center are each within ten miles of Englewood. The court’s panel stated that Englewood Health is one of the last remaining independent NJ hospitals. Mergers and acquisitions continue to take place in this and other states as hospitals struggle to compete and stay independent. An amicus curiae brief supporting the FTC was filed by 23 states plus Washington, D.C. It indicated that such mergers “lead to increased health care costs in local communities and raise the overall cost of health care.”

Some of the state’s communities are already frustrated by many NJ hospitals’ tax-exempt status. While this proposed merger is now officially dead, HMH will undoubtedly attempt further acquisitions.