WASHINGTON, D.C. — The Federal Trade Commission (FTC) recently issued an administrative complaint against Novant Health. The FTC alleges that Novant’s proposed acquisition of Lake Norman Regional Medical Center and Davis Regional Medical Center from Community Health Systems (CHS) could lead to higher prices, reduce quality of care, and dampen incentives for innovation that benefit patients.
“Hospital consolidations often lead to worse outcomes for nurses and doctors, result in higher prices, and can have life and death consequences for patients,” said Henry Liu, Director of the FTC’s Bureau of Competition. “There is overwhelming evidence that Novant’s deal with Community Health Systems will be detrimental to patients in the Eastern Lake Norman Area, including leading to higher out-of-pocket costs for critical healthcare services.”
Currently, Novant operates the Huntersville Medical Center and serves more patients than any other hospital in the Eastern Lake Norman Area. As one of the largest and most expensive hospital systems in the southeastern United States, including North Carolina, its proposed acquisitions raise serious questions about market dominance and patient impact.
The proposed deal would see Novant acquiring Lake Norman Regional Medical Center, located just 11 miles away from Novant’s existing Huntersville Medical Center. Additional assets from CHS would also change hands, including Davis Regional Medical Center, a physician group, a majority interest in an endoscopy center, and a certificate of need to build an ambulatory surgery center.
The FTC alleges that the proposed deal would allow Novant to control nearly 65% of the market for inpatient general acute care services in the Eastern Lake Norman Area, which primarily includes Iredell County and northern Mecklenburg County. These services encompass a broad range of essential medical, surgical, and diagnostic services requiring an overnight hospital stay.
With Novant’s increased market share, the FTC fears it would be in a position to demand higher rates for its services. This could potentially increase annual healthcare costs by several million dollars—costs that would likely be passed on to patients. Furthermore, the deal could reduce Novant’s incentive to compete for patients by improving its facilities, service offerings, and quality of care.
The Commission’s unanimous vote to issue the complaint and seek a temporary restraining order and preliminary injunction signals a clear intent to halt the transaction. The FTC’s next step will be to file a federal court complaint in the U.S. District Court for the Western District of North Carolina, seeking to halt the transaction pending an administrative proceeding.
This action by the FTC underscores the ongoing debate about the impacts of hospital consolidations. While proponents argue they can lead to efficiencies and improved care, critics warn of reduced competition, higher prices, and potential declines in the quality of care.
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