RWJBarnabas Health, Saint Peter's Healthcare System merger blocked
On Tuesday, RWJBarnabas Health (RWJBH) and Saint Peter's Healthcare System (Saint Peter's) announced that they have withdrawn from plans to merge, according to press releases from both organizations.
Both health systems' flagship hospitals are located in New Brunswick and both have connections to Rutgers through various partnerships and affiliations.
RWJBH's Robert Wood Johnson University Hospital is closely affiliated with Rutgers Robert Wood Johnson Medical School and Rutgers Cancer Institute of New Jersey.
Most recently, the two groups signed an integrated practice agreement (IPA) to integrate the University’s Robert Wood Johnson Medical School clinical services with those of RWJBH.
Saint Peter's University Hospital is also a major clinical affiliate with Rutgers Robert Wood Johnson Medical School, Rutgers Cancer Institute of New Jersey and Rutgers New Jersey Medical School.
In 2018, Saint Peter’s began to accept proposals for potential partnerships or affiliations with other healthcare systems. In December 2019, Saint Peter’s and RWJBH signed a letter of intent to explore a partnership together.
Eventually, both parties signed a definitive agreement solidifying their plans to integrate in September 2021.
Under the agreement, RWJBH would invest in Saint Peter's facilities, technology and services while Saint Peter's University Hospital would continue to be a "full-service provider of acute healthcare services."
On June 2, the Federal Trade Commission (FTC) voted unanimously to file a complaint and a lawsuit in federal court against the proposed merger on June 2.
"Saint Peter's University Hospital is less than one mile away from (Robert Wood Johnson University Hospital) in New Brunswick, and they are the only two hospitals in that city," FTC Bureau of Competition Director Holly Vedova said. “There is overwhelming evidence that this acquisition would be bad for patients because the parties would no longer have to compete to provide the lowest prices and the best quality and service.”
Twelve days after the FTC's complaint and lawsuit were filed, RWJBH and Saint Peter's announced that they ended their definitive agreement and plans to integrate, according to an RWJBH press release.
"We are disappointed in the termination of the proposed transaction, which we believe would have transformed quality, increased access and decreased the overall cost of care for the people of this state through the creation of a premier academic medical center," Barry H. Ostrowsky, RWJBH chief executive officer, said in the release.
Saint Peter's Healthcare System, whose flagship hospital remains the only independent hospital operating in Middlesex County, is now considering the best way to move forward, according to the organization's own press release.
This past April, New Jersey healthcare groups Hackensack Meridian Health and Englewood Health also announced that they ended their plans to integrate after long opposition from the FTC, according to MyCentralJersey.
“I am proud to say that this is the third time the Commission has filed a complaint to block an anticompetitive hospital merger so far in 2022," Vedova said. "This enforcement action is a reminder that the FTC remains vigilant in enforcing the antitrust laws and will continue to protect healthcare consumers who are faced with unlawful hospital consolidation."
