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HCA Healthcare accused of monopolizing North Carolina healthcare

por John R. Fischer, Senior Reporter | August 19, 2021
Business Affairs
HCA Healthcare has been accused of using its purchase of Mission Health to monopolize Western North Carolina healthcare
A group of North Carolina residents are accusing HCA Healthcare of creating a monopoly in a class action lawsuit filed Tuesday.

It alleges that the organization hindered competition unfairly in Western North Carolina through its purchase of Mission Health, a six-hospital system based in Asheville, in January 2019. HCA then used “all or nothing” negotiation tactics, it said, to drive up healthcare prices and insurance premiums in Buncombe and Madison counties, according to MedCity News.

“Today, HCA holds an approximate 90% market share … for inpatient [general acute] hospital care in Buncombe County, the most populous county in Western North Carolina, and in nearby Madison County. Because insurers and consumers in the region have no choice but to use HCA, HCA has free rein to dictate the prices it charges insurers and consumers, while at the same time undermining quality to cut costs,” the suit said.

Prior to being acquired by HCA, Mission Health allegedly operated as a monopoly between 1995 and 2019. HCA Healthcare is the nation’s largest for-profit hospital chain and provides about 6% of all inpatient hospital services, according to Rev Cycle Intelligence.

The plaintiffs say that once it bought Mission, HCA used tactics “including tying, all-or-nothing arrangements, gag clauses, and … other anti-competitive terms and negotiating devices” to drive up costs.

"HCA's behavior since taking over Mission, and Mission's prior abuse of its monopoly power, exemplify why healthcare in the United States costs so much more than elsewhere," said the suit.

It notes that former Mission CEO Dr. Ron Paulus was paid $4 million during the last four months of his position alone. According to 2020 Rand Corp. data included in the suit, HCA charged commercial insurers 372% on average above the Medicare price for inpatient and outpatient services. It also charged an average of 393% more than the Medicare price for only inpatient services, compared to a mean of 262% and median of 277% that other North Carolina hospitals charged. Other accusations include lowering quality of care at Mission by cutting costs and reducing staff and of not complying with the recently passed hospital price transparency rule.

“Once we have been served with the lawsuit, we will respond appropriately through the legal process,” Nancy Lindell, Mission Health/HCA Healthcare N.C. Division spokesperson, told MedCity News in an email. “We are committed to caring for Western North Carolina as demonstrated through more than $330 million in charity care and uninsured discounts we provided in 2020, in expansion of hospital service.” She added that it has onboarded nearly 1,200 new members to its staff this year.

The suit comes exactly a year after another was filed against HCA Healthcare by a group of healthcare workers at its healthcare facility, Riverside Community Hospital, in California. They alleged that the hospital chain failed to prepare and protect them against the COVID-19 pandemic. Leading up to this suit was a strike of around 1,000 California nurses against HCA Healthcare in June and July 2020, also over lack of COVID-19 protections and staffing shortages.

The plaintiffs are seeking damages and injunctive and declaratory relief to prevent HCA from engaging in anti-competitive practices. They have requested a jury trial.

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