Hackensack Meridian and Englewood Health Fight For Hospital merger

Hackensack Meridian Health has not given up its fight to acquire Englewood Health, despite a federal court order earlier this month.

The health system said on Wednesday that it will challenge in appellate court the Federal Trade Commission’s complaint that the merger would reduce hospital competition and lead to higher costs and lower quality.

The “notice of appeal” the system filed Wednesday contained a redacted version of the 63-page opinion by U.S. District Judge John Michael Vazquez on Aug. 4, and revealed details of the witnesses and arguments in a case that will shape health care — and help determine which hospitals flourish or flounder — in Bergen County for years to come.

The opinion gave a window, for example, into the tough negotiations that go on between Hackensack Meridian and insurers, which one unidentified insurance executive described as “as close to take it or leave it as I’ve seen in the marketplace without much justification.”

And it revealed that Englewood had embarked on a search for a partner to help modernize its facilities and stabilize its finances in 2018. It focused on five potential partners, whose names were redacted. They were whittled down until, in September 2019, it signed an agreement with Hackensack Meridian.

Among the witnesses who testified during a May hearing and who were mentioned in the redacted decision was Michael Maron, president and chief executive officer of Holy Name Medical Center in Teaneck, a similar hospital in size and services to Englewood that competes with it for patients. He countered arguments from Hackensack Meridian that its flagship Hackensack University Medical Center was often overcrowded and needed to acquire Englewood to be able to transfer some of its patients, according to testimony cited by the judge.

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In addition, insurance executives testified that the rates Hackensack charges insurers for general acute-care services are substantially higher than the rates Englewood charges, the opinion said. Hackensack Meridian’s contracts with insurers contain a clause that once it acquires another hospital, the rates it charges insurers for services at that hospital will be the same as the system’s rates.

Previous acquisitions by Hackensack Meridian led to rate hikes at JFK University Medical Center in Edison and Raritan Bay Medical Center in Perth Amboy and Old Bridge, the judge wrote.

Although the health system said it would waive that contract provision for Englewood, the judge gave “little weight” to the promise, which he noted had been made after the trade commission took a stand on the merger.

Vazquez also dismissed the health system’s argument that any cost efficiencies from the merger would lower prices for consumers. “With history as a guide, the Court doubts that any costs savings Hackensack Meridian Health realizes will be passed through to payors,” his opinion said.

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