HUNTINGTON, West Virginia — A West Virginia hospital's planned takeover of a nearby hospital would likely lead to higher costs to patients and lower quality of care, federal regulators said Friday.
The Federal Trade Commission announced a challenge to Cabell Huntington Hospital Inc.'s proposed takeover of St. Mary's Medical Center in Huntington.
In November 2014, Cabell Huntington agreed to assume control of St. Mary's after the Pallottine Missionary Sisters ended their sponsorship of the hospital after 90 years.
St. Mary's has 393 beds and Cabell Huntington has 303 beds. They are three miles apart and are the top two private employers in Cabell County. The combined operation would represent the second-largest hospital chain in the state behind Charleston Area Medical Center.
In July, Attorney General Patrick Morrisey said St. Mary's would operate as a stand-alone facility after the takeover.
But the FTC said the acquisition would create a near monopoly over general acute care inpatient hospital services and outpatient surgical services in the adjacent counties of Cabell, Wayne, and Lincoln, along with Lawrence County, Ohio.
The commission authorized its staff to temporarily block the acquisition in federal court pending an administrative proceeding, scheduled to start next April. The FTC noted that the acquisition also awaits approvals from the West Virginia Health Care Authority and the Roman Catholic Church.
The FTC said the agreement with Morrisey's office falls short of replicating the benefits of competition.
"If this proposed acquisition goes forward, it would eliminate important competition that has yielded tremendous benefits for Huntington-area residents," FTC Bureau of Competition deputy deputy Steve Weissman said in a statement. "The merged hospitals would have a market share of more than 75 percent, and local employers and residents are likely to face higher prices and reduced quality and service at the combined hospital."
In a statement released Friday, Cabell Huntington's president and CEO said the FTC "misreads the highly competitive landscape in our Tri-State region and overlooks the enormous community benefits" of the acquisition.
Kevin N. Fowler also said Cabell Huntington remains committed to the acquisition.
His counterpart at St. Mary's, Michael Sellards, called the medical marriage "in the best interests of the communities and patients we served."