RWJBarnabas, Saint Peter's Healthcare abandon merger plans
NEW BRUNSWICK – Faced with anti-trust action from the federal government, Saint Peter's Healthcare System and RWJBarnabas Health decided not to move forward with their plans to merge.
RWJBarnabas Health was set to acquire Saint Peter's Healthcare System but both organizations mutually decided not to consummate the merger after "thorough evaluations," according to a Saint Peter's press release Tuesday afternoon.
The organizations made the "difficult decision" after the Federal Trade Commission took action to block the deal, the release said.
Earlier this month, the FTC voted unanimously to take action to block the merger because, according to FTC Bureau of Competition Director Holly Vedova, “there is overwhelming evidence that this acquisition would be bad for patients, because the parties would no longer have to compete to provide the lowest prices and the best quality and service.”
"Saint Peter's University Hospital is less than one mile away from RWJ in New Brunswick, and they are the only two hospitals in that city," Vedova said.
Saint Peter’s and RWJBarnabas signed an agreement in 2020 to merge the two health care systems. That announcement came less than a year after Saint Peter’s and RWJBarnabas signed a letter of intent to explore a strategic partnership.
The acquisition would’ve given the combined health care system a market share of approximately 50 percent for general acute care services in Middlesex County as a whole, easily resulting in a presumption of harm under the antitrust laws, according to an FTC statement.
Earlier: FTC wants to block the RWJBarnabas, Saint Peter's Healthcare merger. Here's why
Saint Peter’s and RWJBarnabas are direct competitors and both systems routinely identify the other as the most significant competitor when assessing competition and strategizing on providing general acute care services in Middlesex County, the FTC said.
“After careful consideration by leadership, the Saint Peter’s Board of Governors, and the Most Reverend James F. Checchio, Bishop of the Diocese of Metuchen, and sole corporate member of Saint Peter’s, we have decided to terminate the Definitive Agreement to fully integrate with RWJBarnabas Health," Leslie D. Hirsch, president and CEO of Saint Peter’s Healthcare System, said in the release. "We are very disappointed with this outcome. However, we are grateful for the strong partnership we’ve had with the RWJBarnabas leadership.”
Hirsch said, "we were truly excited about the potential of this opportunity with RWJBarnabas to create a premier academic medical center of national distinction that would have improved quality and increased access especially to the most vulnerable in the communities we serve."
"We are now assessing the best way to move forward as we consider potential options to ensure Saint Peter’s longstanding Catholic healthcare mission," he added.
“This difficult decision was not reached lightly,” Barry H. Ostrowsky, CEO of RWJBarnabas Health, said in a statement. “We are disappointed in the termination of the proposed transaction, which we believe would have transformed quality, increased access and decreased the overall cost of care for the people of this state through the creation of a premier academic medical center. Despite the loss of this opportunity, RWJBarnabas Health remains resolute in its commitment to serve the people of New Jersey – especially those who reside in our most vulnerable, chronically underserved communities – and shall continue to do so.”
Headquartered in West Orange, RWJBarnabas is a nonprofit corporation that operates 12 general acute care hospitals, several ambulatory surgical centers, a pediatric rehabilitation hospital and a freestanding behavioral health center in New Jersey.
Saint Peter’s Healthcare is a nonprofit corporation headquartered in New Brunswick that operates an independent hospital, which includes a state-designated children’s hospital.
“I am proud to say that this is the third time the Commission has filed a complaint to block an anticompetitive hospital merger so far in 2022,” Vedova, of the FTCsaid in a statement. “This enforcement action is a reminder that the FTC remains vigilant in enforcing the antitrust laws and will continue to protect healthcare consumers who are faced with unlawful hospital consolidation.”
Earlier this spring, Hackensack Meridian Health and Englewood Health officially dropped their plans for a merger.
The two institutions dropped their fight against the FTC’s objections to their plan for one of the state's largest health systems to acquire the Englewood hospital, a proposal that was announced with great fanfare — and promises of a $440 million investment by Hackensack Meridian — in October 2019.
Email: sloyer@gannettnj.com
Susan Loyer covers Middlesex County and more for MyCentralJersey.com. To get unlimited access to her work, please subscribe or activate your digital account today.
This article originally appeared on MyCentralJersey.com: RWJBarnabas, Saint Peter's Healthcare merger plans abandoned
