Following the FTC’s lawsuit, the parties abandoned the proposed merger of two health systems.
Methodist Le Bonheur Healthcare entered a definitive agreement to acquire two Memphis-area hospitals owned by Tenet Healthcare Corporation for $350 million. The Federal Trade Commission retained Cornerstone Research to support an internal FTC expert during the regulatory review of the proposed transaction.
Cornerstone Research supported an expert to provide analysis of a hospital merger with narrow provider networks in commercial plans.
The FTC sued to block the merger and filed a preliminary injunction to halt the deal. The agency alleged that the proposed acquisition would substantially lessen competition in the Memphis area for a range of services, leading to increased healthcare costs and diminished incentives to expand service offerings, invest in technology, improve access to care, and focus on healthcare quality in the market.
The FTC expert provided an analysis of the Memphis healthcare market using standard hospital merger analysis. Additionally, our analysis included the assessment of hospital mergers in an environment where commercial plans exhibited narrow provider networks.
In December 2020, the parties announced that they were abandoning the proposed acquisition, and cited the FTC’s lawsuit as a reason for the cancellation.