The Federal Trade Commission continued its relentless focus on combinations in the health care industry last month when it filed an administrative complaint challenging a merger of two West Virginia hospitals, In the Matter of Cabell Huntington Hospital (FTC Docket No. 9366). Given the FTC’s recent successes in thwarting other health care mergers it saw as anti-competitive, it is not surprising that the agency is taking on this particular fight. What is somewhat surprising, though, is that the FTC is doing so against the wishes of West Virginia’s antitrust enforcer, Attorney General Patrick Morrisey. As a close reading of the complaint reveals, the FTC not only criticizes the hospital merger itself but essentially indicts West Virginia’s regulation of health care facilities as inherently anti-competitive. As such, it raises serious questions of comity and federalism, as well as the future of the much-touted federal and state antitrust partnership, that will merit careful consideration as the case progresses.

The merger in question is a proposed acquisition of St. Mary’s Medical Center by Cabell Huntington Hospital. Both facilities are in Huntington, West Virginia, approximately three miles from each other. Cabell and St. Mary’s have a combined market share of over 75 percent for inpatient hospital services in a geographic market consisting of three West Virginia counties and one Ohio county (the so-called four-county Huntington area). In the same geographic area, the two hospitals likewise have a dominant combined market share in outpatient surgical services, according to the FTC.

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