The Federal Trade Commission declined to intervene in UPMC’s plans to acquire Washington Health System, removing the last regulatory hurdle in approving the deal.
Federal officials had until midnight Friday to file a lawsuit or refer the matter to an administrative law judge to attach guardrails on the tie-up while meeting a review deadline.
The acquisition was not challenged in U.S. District Court for the Western District of Pennsylvania by the deadline and UPMC spokesman Paul Wood said Saturday the matter had not been referred to an FTC administrative law judge for further review, an option that could have attached strings to the approval.
The FTC’s tacit endorsement means the Pittsburgh-based health system will add to its 40-hospital portfolio the two-hospital Washington County health system, which includes 18 medical practices at 24 locations, and WHS will be spared the insolvency that Washington Health System President and CEO Brook Ward predicted unless WHS joined a larger system.
SEIU Healthcare Pennsylvania, representing about 200 WHS union employees, had opposed the merger, although — at a hearing in January held by the attorney general’s office — some other unions representing workers in the health system spoke in favor of the deal.
In a statement released Friday, WHS employees and SEIU Healthcare members Cindy Orris, Melissa Duran and Marisa Petro said the union would hold UPMC accountable.
“While that agreement has important protections, it should have done more to guarantee our facilities will remain open and no jobs or services will be cut,” they told the Observer Reporter. “We are united to hold UPMC accountable to abide by the agreement as well as honor the promises that have been made to our community to invest $300 million and maintain all services, insurance plan access, jobs and union contract standards.”
The FTC’s tacit endorsement of the deal came a day after the state attorney general greenlighted the merger. In a prepared statement Thursday, Attorney General Michelle Henry said the UPMC/WHS tie-up would “preserve affordable access to health care in Washington and Greene counties.”
The compliance agreement that UPMC — which has an insurance arm in addition to its hospital operations — reached with the attorney general prohibits various contractual stipulations with other health insurers that would limit competition.
Federal officials had until May 31 to oppose the merger by filing a lawsuit in federal court or taking other administrative action.
No action by the FTC was required for approval, with one caveat: the trade commission has the authority to challenge a merger as anticompetitive after it has been sealed.
For example, in 2020, the FTC issued an administrative complaint challenging the merger of two prosthetics manufacturers that were top sellers of prosthetic knees equipped with microprocessors. Otto Block HealthCare North America Inc. had already merged with FIH Group Holdings LLC, but as a result of the FTC’s action, the newly merged company divested FIH Group’s assets.
On Friday, an FTC spokeswoman declined to comment on the UPMC/WHS deal.
Washington Health System, the biggest employer in its home county, traces its history back 127 years and employs about 2,700 people.
Meanwhile, six miles from the 278-bed Washington Hospital, UPMC rival Highmark Health this year began reconstructing its 104-bed hospital in Canonsburg. The $232 million project is expected to be completed by 2027.
Kris B. Mamula: kmamula@post-gazette.com
First Published: June 1, 2024, 12:03 p.m.
Updated: June 1, 2024, 12:04 p.m.