FTC Tries to Block Inova Health, Prince William Hospital Merger

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Written by Rob Kurtz

Tuesday, 13 May 2008

The Federal Trade Commission, joined by the Commonwealth of Virginia, has filed a complaint in federal court to block Northern Virginia’s Inova Health System Foundation’s proposed acquisition of the Prince William Health System (PWHS) in Manassas, Va.

The FTC is seeking a temporary restraining to block the deal "pending a full administrative trial on the merits," according to the FTC.

The complaint charges that the acquisition would violate the federal antitrust laws by reducing competition for general acute care inpatient hospital services in Northern Virginia. The complaint also charges that the merger would lead to consumers in Northern Virginia payer higher prices

“There is no question that Northern Virginia residents have benefited from the robust competition between Inova and Prince William Hospital through better services and lower prices,” said Jeffrey Schmidt, director of the FTC’s Bureau of Competition, according to an FTC press release. “If Inova acquires [PWHS], this vital competition will be lost, health care prices will increase, and many residents will be forced to accept reduced health care coverage or no coverage at all.”

Inova is the largest hospital system in Northern Virginia, owning five hospitals in the region. PWHS is Inova’s closest competitor. A merger would give Inova control of approximately 73 percent of the licensed beds in the region, according to the FTC.