FTC Has Concerns Over Community-Shannon Merger
The Federal Trade Commission has stepped in and is asking Texas not to approve the merger between Shannon Medical Center and Community Hospital.
The FTC feels that the merger of our San Angelo hospitals will cause a loss of competition, which in turn, will result in higher prices and harming consumers.
The FTC stated that "Shannon and SACMC serve patients from a similar geographic area with similar health conditions, and there are very few nearby third-party hospitals. These diversion ratios strongly indicate that a merger between Shannon and Community would substantially lessen competition and lead to significant price increases, as well as reduced incentives to maintain or improve quality."
Another concern raised by the FTC was that a merger could depress wage growth for registered nurses.
In 2019, changes to Texas state law opened a pathway for the merger of the hospitals by trading federal oversight for state oversight.
Rep. Drew Darby, who introduced the changes to state law allowing for mergers of hospitals in counties with populations of 140,000 people or less that are not adjacent to a metropolitan hospital market, promised the new legislation would provide oversight that would negate the FTC's concerns.
Darby said on Jan 6th, 2020 "There would be protections in place for those who live and work in the Concho Valley that access to care is not diminished, that it does not result in an increase in prices to the consumer, and there are protections afforded by the state".
Back in April of 2020, Community Health Systems which is based in Tennessee, announced having signed an agreement to sell San Angelo Community Medical Center and its associated assets to Shannon Health System.
Shannon, which has been serving West Texas for over 85 years, said "it is acting upon a once-in-a-generation opportunity to combine the strength and expertise of our community’s hospitals and reinvest cost savings to preserve and expand access to much needed healthcare services".
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