The North Carolina State Treasurer has urged the court to halt Novant Health’s planned $320m acquisition of two hospitals in the state, supporting the US Federal Trade Commission’s (FTC) previously filed lawsuit to restrict this deal. 

According to a Reuters report, NC Treasurer Dale Folwell filed a “friend of the court” brief, calling on the court to block the transaction. 

US District Judge Kenneth Bell of the Western District of North Carolina is considering an injunction to stop the acquisition as the FTC pursues an administrative challenge.  

Earlier this year, the FTC filed a lawsuit against Novant Health, a major hospital system in the southeastern US, over its proposed purchase of Lake Norman Regional Medical Center and Davis Regional Medical Center in North Carolina from Community Health Systems.  

Community Health Systems’ Lake Norman is a 123-bed acute care hospital in Mooresville, North Carolina, while Davis Regional Medical Center in Statesville is in the process of transitioning to an inpatient behavioural health hospital.  

Announced in February 2023, this $320m deal is under scrutiny for potentially increasing market concentration in parts of North Carolina. 

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The FTC raised concerns that the potential deal could lead to higher healthcare costs and stifle innovation in the healthcare sector.  

In a filing submitted in response to the FTC’s lawsuit, Novant Health and Community Health Systems said that the FTC’s position is based on a “distorted and artificially narrow view of healthcare competition” in the Charlotte area of North Carolina.  

Novant Health has defended its acquisition plan, stating it will “benefit quality of care, long-term outcomes and competition”.  

The company criticised the North Carolina Treasurer’s brief for echoing the FTC’s “one-size-fits-all” stance on hospital mergers.  

However, the FTC and Treasurer Folwell argue that the deal could lead to millions of dollars in increased healthcare costs due to reduced competition. 

An administrative hearing before the FTC is set for 26 June to assess the legality of the acquisition.