FTC And Rhode Island Join Forces to Block Merger of State’s Two Largest Healthcare Providers

The Federal Trade Commission voted unanimously today to join with the State of Rhode Island in suing to block the merger of Lifespan Corporation (“Lifepsan”) and Care New England Health System (“CNE”).

The FTC and the Rhode Island Attorney General are filing a complaint in federal district court seeking a temporary restraining order and preliminary injunction to stop the proposed merger of Rhode Island’s two largest healthcare providers, and to maintain the status quo pending an administrative trial on the merits of the case.

Lifespan and CNE are the largest and second largest healthcare providers in Rhode Island.  The proposed merger would result in the combined entity controlling at least 70 percent of the markets for inpatient general acute care hospital services and inpatient behavioral health services.  According to the FTC, the proposed merger would extinguish competition between the two dominant hospital systems in the state of Rhode Island.

The FTC noted that it was likely that the proposed merger would substantially lessen competition in the relevant labor market in violation of the Clayton Act.  The Commission specifically noted that, in addition to being concerned with firms competing for customers, it also was concerned that employers compete to “attract and retain workers.”  In doing so, the Commission emphasized that consolidation and concentration harms labor markets, and in particular workers in the healthcare sector, who like “all workers, deserve the protection of fair competition for their labor.”  This is yet another example of the importance the FTC, under its current leadership, places on labor markets when analyzing competitive effects.  We will be watching this case closely as it proceeds to an administrative trial.

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