Independently owned South County Health is sharply opposing the proposed merger of Lifespan and Care New England, relying in part on a former Federal Trade Commission official who now works for one of the largest law firms in the U.S.
Aaron Robinson, president./CEO of South County Health — which operates South County Hospital in Wakefield — said the merger would give too much power over healthcare in Rhode Island to the state’s two largest hospital groups.
Robinson said South County hired the law firm of Jones Day to get an understanding of how merger guidelines for the Federal Trade Commission and the U.S. Justice Department would influence the FTC’s consideration of the proposal. As part of that, South County worked with Kenneth Field, co-chair of the global Health Care Practice at Jones Day and a former counsel to the director of the Bureau of Competition at the FTC.
Robinson said Jones Day and Field helped shape the information presented by South County in depositions to state and federal regulators.
“He has also brought economists to the table that have worked with the Federal Trade Commission in developing the quantitative tools that they use to assess market concentration, and I think it’s through those interactions that the FTC will likely oppose [the merger],” Robinson said.
Robinson said the Herfindahl-Hirschman Index, which measures market concentration, shows a score of close to 6,300 points for the proposed Lifespan-Care New England merger, when anything above 2,500 points is considered highly concentrated.
The merger faces approval by the FTC and state Attorney General Peter Neronha. The former could come this month.
Supporters of the merger say Lifespan, Care New England and Brown University could develop an academic health system that would improve healthcare in Rhode Island, in part through a heightened focus on public health. The four major unions representing workers at the two hospital groups last week came out in support of the deal.
During testimony Monday to a General Assembly committee, Brown President Christina Paxson echoed concerns that a rejection of the merger could lead to a scenario in which for-profit companies would negatively affect the state’s hospital landscape.
But Robinson — who calls South County the state’s lone remaining independent hospital — said he rejects the view that the merger would resolve fiscal challenges for the state’s dominant hospital groups.
“We think that the ills of an 80 percent monopoly certainly outweigh any proposed benefits that the parties bring forward about what would come with a merger with Care New England and Lifespan,” he said.
If state and federal regulators reject the merger, Robinson said the proponents could conceivably pursue “a state-level end-around called a Certificate of Public Advantage, a COPA …. it provides state-level immunity against federal anti-trust enforcement.”
Ian Donnis can be reached at idonnis@ripr.org. Follow him on Twitter @IanDon. Sign up here for his weekly RI politics and media newsletter. (Disclosure: my wife works as a nurse for Lifespan.)
