California Attorney General, FTC challenge John Muir acquisition of medical center


(BCN) -- California Attorney General Rob Bonta and the Federal Trade Commission have filed an antitrust lawsuit challenging John Muir Health's acquisition of controlling interest in San Ramon Regional Medical Center.

The suit, filed Friday in U.S. District Court for the Northern District of California, seeks to block John Muir Health from acquiring Tenet Healthcare Corp., which holds controlling interest in the Contra Costa County medical center.

John Muir currently owns 49 percent of San Ramon Regional Medical Center, a 123-bed general acute care hospital, through a joint venture. Tenet holds a 51% majority.

John Muir announced a definitive agreement with Tenet in January to acquire sole ownership for $142.5 million.

The California Department of Justice and the FTC argue that the deal is inherently anticompetitive and violates the Clayton Antitrust Act, which prohibits mergers and acquisitions that would result in less market competition.

The complaint argues that the acquisition would lead to higher costs for patients, employers and insurers by eliminating competition between the medical center and John Muir's nearby hospitals, Walnut Creek Medical Center, with 540 beds, and Concord Medical Center, with 244 beds.

"When healthcare markets illegally consolidate, patients pay the price," Bonta said in a statement. "Competitive markets help keep prices lower. We will continue to fight to ensure that Bay Area residents - and all Californians - can access the affordable healthcare they need."

The attorney general said a 2020 RAND study found Walnut Creek Medical Center was the costliest hospital in the U.S. from 2016 through 2018.

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