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The planned acquisition of San Ramon Regional Medical Center by John Muir Health that has been on the table for nearly a year is no longer going forward, with officials at JMH and the current majority owner scrapping the deal weeks after an antitrust complaint aimed at halting it.
John Muir Health officials announced Friday that they and Tenet Healthcare Corp. had decided not to seek legal recourse following a federal lawsuit filed jointly by the Federal Trade Commission and California Attorney General’s Office.
“We made this decision due to the cost and disruption of litigation,” JMH officials said in a statement Monday.
The decision means that the hospital will continue to operate under its current ownership for the foreseeable future, with Tenet owning 51% of the hospital and managing its operations and JMH continuing to have 49% ownership without operating rights.
“Both Tenet and JMH remain very disappointed in the FTC’s decision and strongly disagree with the assumptions and conclusions that were reached in their court submission,” JMH officials said.
“We maintain our shared belief that the proposed transaction would have provided substantial benefits for patients and the community,” they added. “However, the significant investment of time and money required to litigate can be better spent on other initiatives within our health systems and in support of our joint venture.”
Under the now-defunct deal, JMH would have purchased Tenet’s shares of the hospital and other assets for $142.5 million, with officials and employees at SRRMC already gearing up to see the facility change hands in recent months.
Federal and state regulators filed a joint antitrust lawsuit seeking to block the acquisition on Nov. 17, alleging that it would function to monopolize emergency and critical health care services in the San Ramon Valley and put an end to what they said was an existing, healthy competition between Tenet and John Muir.
“John Muir’s anticompetitive hospital takeover would have driven up health care costs for critical services like heart surgery, spinal surgery, and maternity care,” Henry Liu, director of the FTC’s Bureau of Competition, said in an announcement Monday. “It also threatened to eliminate improvements in care driven by competition, which directly benefit patients.”
JMH officials characterized their relationship with Tenet as a partnership rather than a competition, however, and said they would continue to work with SRRMC and other healthcare facilities in the Tri-Valley.
“As partners, we remain committed to delivering high-quality, compassionate care and expanding access to specialty care in San Ramon, Dublin, Pleasanton and surrounding areas,” JMH officials said.
Under the acquisition, JMH would have also acquired ownership and operating rights at Pleasanton Diagnostic Testing, which is also set to remain under Tenet following the deal’s termination.
Following the announcement that JMH and Tenet had decided not to move forward with the deal, federal and state prosecutors moved to dismiss the federal case they filed last month, with the FTC dismissing its administrative challenge of the deal as of Monday.
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