On June 3, the city of Brevard, North Carolina, filed suit against for-profit hospital operator HCA Healthcare. The suit alleges various anti-competitive practices in the areas of general acute care (GAC) and outpatient services, as well as violations of the Sherman Antitrust Act (1890). In simple terms, a GAC hospital is one that provides 24-hour inpatient care.
HCA’s 2021 total revenues approached $59 billion, with a net income of nearly $7 billion. The healthcare company owns and operates upwards of 180 hospitals nationwide.
Residents of North Carolina’s Buncombe County filed a previous antitrust complaint against HCA in summer 2021. Both suits stem from HCA’s 2019 acquisition of Asheville-based Mission Health. Asheville, 35 miles from Brevard, is the Buncombe County seat.
The HCA acquisition was allowed after complex negotiations with North Carolina Attorney General Josh Stein. The North Carolina AG is authorized to review any business deal in which a nonprofit corporation in the state (in this case, Mission Health) sells either the bulk or all of its assets.
Both antitrust lawsuits allege that Mission Health had held an effective monopoly in the greater Asheville-Brevard area since 1995, when the nonprofit merged with St. Joseph’s Hospital. According to the city of Brevard’s complaint, Mission operated “a continuing, multifaceted, coercive scheme designed to foreclose competition from rivals, to maintain or enhance its monopoly power in the relevant markets,” and ultimately to charge prices noticeably above competitive levels for GAC and outpatient services.
The suit explicitly identifies several practices including the following:
• “All-or-nothing” arrangements with healthcare payers, in which payers are forced into service bundles
• Measures known as anti-steering and anti-tiering, which restrict healthcare payers from guiding members to less expensive or higher quality care options
• So-called gag clauses that obstruct price transparency.
The complaint also argues that HCA “continued and reinforced” these anti-competitive practices after acquiring Mission. To support its claims, the court filing states that HCA controls more than 85% of greater Asheville’s GAC market and over 70% of the market in surrounding counties, as measured by patient volume. The suit comes on the heels of recent meetings between the city of Brevard and HCA leadership.
