Atrium Health

Atrium Health

The Federal Trade Commission has revealed that it investigated a proposed merger of hospital systems in Middle Georgia.

The announcement Wednesday that the FTC had reviewed the deal – and then closed its probe – came less than a week after the two hospital systems said they were calling the deal off. Atrium Health Navicent, in Macon, and Houston Healthcare, based in Warner Robins, said last Thursday that they had ended their partnership talks after three years.

The FTC, in a press release, said its staff determined the deal, if consummated, “would eliminate the intense competition’’ between the two multi-hospital systems.

The FTC interest in the Middle Georgia deal likely will have no effect on Atrium Health’s proposed merger with Floyd Medical Center in Rome in northwest Georgia. That’s because Rome is also served by an HCA hospital, Redmond Regional Medical Center.

The agency said its investigation showed the merger “was likely to cause significant harm to central Georgia patients and businesses in the form of higher health care costs. Staff also uncovered evidence that competition to improve quality of patient care, invest in facilities and technologies, and expand access to healthcare services would be harmed by the merger.’’

Atrium Health Navicent and Houston Healthcare, in their joint statement last week, said they had “mutually agreed’’ to stop pursuing the deal, and as a reason they cited the overall effect of the COVID-19 pandemic.

The pandemic and its impact “caused both organizations to re-evaluate the parameters of the agreement, and we agreed it was in both of our interests to step away from the combination process,’’ the two systems said in a statement. The statement did not mention FTC scrutiny of the deal.

A spokeswoman for Atrium on Thursday referred a reporter to the previously issued statement, and declined to address the federal investigation.

The FTC said the agency’s vote to disclose the existence of the investigation and close it was 4-0.

The federal agency left no doubt that it took a negative view of the proposed deal. The collapse of merger talks “is great news for patients in central Georgia,’’ said Acting FTC Chairwoman Rebecca Kelly Slaughter in a statement. “I commend staff for their excellent work on this investigation and their commitment to promoting competition in our health care markets.”

An agency spokeswoman Thursday declined to answer specific questions from a reporter about the Middle Georgia probe.

But the FTC spokeswoman, Betsy Lordan, said in general that “if the FTC is investigating a proposed merger, the parties are aware of it because the FTC issues a second request and collects documents from them. Parties generally understand that in such cases, the FTC could issue a complaint and challenge their deal. If the FTC is investigating and the parties abandon their deal, the FTC typically closes the investigation.”

Atrium Health is a nonprofit health system based in Charlotte. It took over Navicent Health in 2019.

The scrutiny of the Atrium/Houston deal was the FTC’s biggest hospital merger investigation in Georgia since its probe of an Albany agreement several years ago.

That review stemmed from Phoebe Putney Health System’s 2011 acquisition of Palmyra Medical Center, the only hospital competing with it in the Albany market, for $195 million. The FTC challenged the deal for antitrust reasons, and the dispute became a long-running court case.

A settlement in 2015 allowed Phoebe Putney Health System to keep the former Palmyra, but it prohibited Phoebe Putney from opposing a CON application for any other general acute-care hospital in the Albany area for up to five years. CON is the process by which the state of Georgia authorizes construction and operation of health care facilities.

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