FTC opposes proposed merger of Mountain States, Wellmont

The Federal Trade Commission has recommended that Virginia regulators reject the proposed merger of two large regional systems that operate in the state: Mountain States Health Alliance and Wellmont Health System.

FTC official Mark Seidman said the deal will create an anticompetitive healthcare climate in the state, leading to higher prices and lower quality of care. Agency staff also submitted a report outlining their opposition to the merger.

The state, which has the authority to approve the merger despite a recommendation from the FTC to oppose it, requested that the agency investigate the proposed merger before making its decision.

Mountain States and Wellmont said they will “explicitly address the shortcomings” in a written response on the FTC’s opinion to the Southwest Virginia Health Authority by Oct. 10.

Mountain States and Wellmont Health are both large systems with locations in multiple states. Johnson City, Tenn.-based Mountain States is a 13-hospital system that serves Kentucky, North Carolina, Tennessee and Virginia. Kingsport, Tenn.-based Wellmont is a six-hospital system that serves Tennessee and Virginia.

The FTC staff report found the combined system would control 71% of the geographic area they both serve.

In a statement, the systems opposed the FTC’s opinion that the merger would result in higher prices. “There have been several examples where arrangements similar to what we have proposed have resulted in lower costs to consumers and high quality,” they said.