Federal anti-monopoly regulators drill deeper into Beaumont-Spectrum merger

August 27, 2021, 5:18 PM

Federal Trade Commission lawyers are soliciting reactions from big Michigan companies whose health costs would be affected by a merger of Beaumont Health and Spectrum Health, according to Crain's Detroit Business.

Lawyers from the FTC have spent the past few weeks meeting with large employers and other stakeholders who may have reason to oppose the merger, Crain's learned from a source familiar with the review who requested anonymity. The FTC would not comment.


The anti-trust review, launched because the hospital networks are Michigan's biggest by far, is intensified as part of new scrutiny of "corporate consolidation [that] has been accelerating," as the White House put it early last month.

"A smaller number of large companies now control more of the business than they did 20 years ago. This is true across healthcare" and other industries, says a White House summary of a presidential directive to the FTC and Justice Department.

"That lack of competition drives up prices for consumers. As fewer large players have controlled more of the market, mark-ups (charges over cost) have tripled. ...

"In the [executive] order, the president underscores that hospital mergers can be harmful to patients and encourages the Justice Department and FTC to review and revise their merger guidelines to ensure patients are not harmed by such mergers."

Beaumont and Spectrum, based in West Michigan, announced merger plans internally June 16 and to journalists the next day.

Deadline Detroit columnist Eric Starkman, who broke the news before the public announcement, wrote the next day:

There is compelling research showing that hospital mergers result in higher patient costs and reduced quality of care.

The hospital giants filed documents this summer to the FTC for preliminary review, Crain's notes Friday afternoon in a subscribers-only post.

The agency can rule the deal can move forward or initiate a deeper review, called a "second request," that seeks more information from the parties and from outside stakeholders.

The FTC's review of the Beaumont-Spectrum merger is likely in the "second request" phase. However, the review does not indicate whether the FTC may take any action to halt or modify the merger. 

The FTC is seeking to determine whether the proposed deal — which creates the state's largest employer and health care system with a $12-billion, 22-hospital system that employs 64,000 — reduces health care competition locally. ... Inpatient and outpatient services for Grand Rapids-based Spectrum are notably more expensive than Beaumont.


Starkman: Will President Biden Derail Beaumont CEO John Fox’s Gravy Train to Atlanta?, July 11

Read more:  Crain's Detroit Business

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