Le Bonheur has plans to buy Memphis hospitals, Federal Trade Commission against it

Updated: Nov. 13, 2020 at 10:26 PM CST
Email This Link
Share on Pinterest
Share on LinkedIn

MEMPHIS, Tenn. (WMC) - Methodist Le Bonheur Healthcare wants to buy Saint Francis Hospitals in Memphis and Bartlett. But the Federal Trade Commission is trying to stop the sale.

The FTC went to federal court this week to block the transaction, arguing that if it goes through, the sale will be detrimental to healthcare in the Memphis metro.

Methodist announced in 2019 that it wanted to buy both Saint Francis Hospitals from Dallas-based Tenet Healthcare Corporation along with the doctors' practices associated with the hospitals and six MedPost urgent care centers.

It’s a $350 million dollar deal that Methodist says will expand its reach in the Memphis area.

But the FTC says the sale will reduce the quality of care, increase health care costs and reduce competition.

“Competition between hospitals helps keep prices down and quality high, and that’s as true in Memphis as it is elsewhere,” Daniel Francis, Deputy Director of the FTC’s Bureau of Competition, said. “It’s clear that patients in the Memphis area have benefitted from the competitive pressure that Saint Francis brings to bear on Methodist, through lower rates, more options for insurers and patients, and quality improvements. This transaction would take that competition away, and patients will pay the price.”

The FTC filing says only four hospital systems provide general acute care services in the Memphis area right now.

The complaint says that the proposed acquisition would reduce that number to three, giving the combined health system control of approximately 60 percent of the Memphis-area market for general acute care services. Only one other major hospital system, Baptist Memorial Health Care, would meaningfully constrain the combined health system.

The fourth system, says the suit, is Regional One, and it’s smaller with a different patient population and focus.

Sally Hurt-Deitch, CEO, Saint Francis Healthcare and Michael Ugwueke, President + CEO, Methodist Le Bonheur issued a joint reply:

“Our joint commitment has always been to improve healthcare delivery for the residents of Memphis, Bartlett and the surrounding communities, including enhancing access to care, cutting-edge medical technology and the highest quality physicians and staff. Our two organizations promote a culture of compassion backed by strong core values, which together, we believe will have an even greater impact on care delivered in these communities. We are reviewing this recent action by the FTC and actively considering next steps. We are surprised by the FTC action given the strong support for the transaction by local stakeholders, including leading local health plans, physicians, employers, and community leaders and the evidence that the transaction will lead to lower prices, improved quality, and enhanced access to care for Memphis-area patients.”

The FTC filed a complaint in the U.S. District Court for the Western District of Tennessee seeking a temporary restraining order and preliminary injunction to stop the deal pending an administrative trial. The administrative trial is scheduled to begin on May 18, 2021.

Copyright 2020 WMC. All rights reserved.