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Washington Health System's flagship Washington Hospital. The FTC has reached out to Allegheny Health Network, Penn Highlands Healthcare and other medical centers for comment on UPMC’s proposed acquisition of Washington Health System as part of a regulatory review that includes the state Attorney General.
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FTC steps into UPMC-Washington Health System merger talks

Pittsburgh Post-Gazette archives

FTC steps into UPMC-Washington Health System merger talks

The Federal Trade Commission is reviewing UPMC’s latest proposed health system acquisition, a development that has derailed similar deals.

The FTC has reached out to Allegheny Health Network, Penn Highlands Healthcare and other medical centers for comment on UPMC’s proposed acquisition of Washington Health System as part of a regulatory review that includes the state attorney general. The FTC has the option — but no mandate — to get involved in hospital mergers and its role in the UPMC-WHS deal comes at a time of escalating consolidation in health care, tighter federal guidelines for anticompetitive behavior and closer scrutiny of mergers.

Officials at the FTC, state attorney general and WHS have declined to comment.

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“We’re working to complete the affiliation as soon as possible,” UPMC said in a statement Tuesday. “It would allow WHS to preserve and enhance high-quality health care services for communities it serves.”

Washington Hospital
Kris B. Mamula
Hearing Thursday for UPMC-Washington Health System merger

UPMC, the biggest non-governmental employer in the state, dominates Western Pennsylvania for medical services.

Consumers have lots of choices for care in Washington County. In addition to UPMC and WHS, DuBois Pa.-based Penn Highlands Healthcare competes for patients at its Mon Valley Hospital in Carroll Township. Allegheny Health Network also owns a hospital in Washington County, AHN Canonsburg, where it’s planning a $232 million project to replace the building and add medical offices by 2027 — 6 miles from Washington Hospital.

AHN officials were not immediately available for comment Tuesday.

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Competitive pressures in the region also come from Morgantown-based WVU Medicine, which operates an outpatient clinic in Waynesburg, a few miles from the Washington Health System Greene Hospital.

If approved, UPMC would pick up two WHS hospitals in Washington and Greene counties and 18 medical practices in 24 locations, including the Wilfred R. Cameron Wellness Center, which offers residents a swimming pool, sauna and spa. UPMC already owns more than 20 outpatient and surgical centers in the region.

Financial details of the deal, which is opposed by SEIU Healthcare Pennsylvania, a union representing health care workers, have not been disclosed.

After a review, the FTC can challenge hospital mergers in court. Such challenges have prompted at least three health systems to scrap deals — including RWJBarnabas Health, which dropped plans to acquire St. Peter’s Healthcare System in New Jersey, and HCA Healthcare, which operates 182 hospitals, and which ended its acquisition of five Steward Health Care System hospitals in Utah, both in 2022.

“We are feeling invigorated and looking to fulfill the executive order’s call to be aggressive on antitrust enforcement,” Mark Seidman, an assistant director in the FTC’s Bureau of Competition, told Kaiser Health News last year.

Among other things, the FTC’s new merger guidelines deem certain mergers harmful to competition, including ones giving the merged entity more than 30% market share. The FTC uses a complex formula to determine market share, but as of March 2023, UPMC said it controlled 43% of the inpatient market for medical-surgical services in the 29 counties of Western Pennsylvania, which includes Washington County.

FTC involvement in a hospital merger would likely delay a final decision by regulators, according to attorney Beth Vessel, a partner at the Miami, Fla.-based law firm of Holland & Knight LLP, who’s not involved in the UPMC-WHS talks

“Thirty percent is pretty small,” she said. “It just means more transactions will be challenged as potentially anticompetitive.”

Kris B. Mamula: kmamula@post-gazette.com 

First Published: January 9, 2024, 8:03 p.m.
Updated: January 10, 2024, 1:45 p.m.

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Washington Health System's flagship Washington Hospital. The FTC has reached out to Allegheny Health Network, Penn Highlands Healthcare and other medical centers for comment on UPMC’s proposed acquisition of Washington Health System as part of a regulatory review that includes the state Attorney General.  (Pittsburgh Post-Gazette archives)
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