Attorney General George Jepsen announced today that he has completed his antitrust investigation of the proposed merger of Yale-New Haven Hospital and The Hospital of Saint Raphael and will not seek to block the merger under Connecticut’s antitrust law.
The investigation, coordinated with the Federal Trade Commission (FTC), sought to determine whether Yale’s acquisition of Saint Raphael would substantially lessen competition for medical services in the Greater New Haven area by, among other things, providing the merged entity with the ability to use its bargaining power to force third-party insurers to pay higher levels of reimbursement.
“Based on the evidence developed during the investigation, and in light of the law applicable to these types of transactions – including taking into consideration St. Raphael’s precarious financial condition and other expected efficiencies that will be realized through the acquisition – I have decided not to seek to block the merger under Connecticut’s antitrust law,” Attorney General Jepsen said.
The Attorney General and the FTC have independent authority to investigate hospital mergers and to challenge them if there is a determination that the merger will substantially lessen competition by, for example, raising the cost of medical care for employers and consumers.
“As a general proposition merger investigations are inherently complicated,” the Attorney General said. “This maxim applies even more so here given the breadth of antitrust issues analyzed and the complexity of the services offered. My office, in conjunction with the FTC, has reviewed thousands of documents produced by the parties and by various other entities potentially affected by the transaction. We have also extensively interviewed local employers, health insurers, doctors, competing hospitals and community groups to gain a better understanding of the workings of the health care market in Greater New Haven.”
Although not a condition of Jepsen’s decision, Yale has agreed to the Attorney General’s request that it maintain current levels of charitable healthcare and financial assistance and provide the same level of service and assistance to patients receiving care on the St. Raphael’s campus.
The Attorney General praised the close cooperation between his staff and the FTC. “I think in many ways the work of my staff and the FTC on this matter is a textbook example of how antitrust enforcers can work together efficiently and effectively in an effort to achieve our mission while minimizing the regulatory compliance burdens on businesses in the state,” he said.
Assistant Attorneys General Antonia Conti and Gary Becker, with Assistant Attorney General Michael Cole, chief of the Antitrust Department, assisted in the investigation.