Following the Federal Trade Commission’s recent move to block a deal under which RWJBarnabas Health would have acquired Saint Peter’s Healthcare System, the Catholic hospital said it will not move forward with the proposed transaction.
According to a June 14 announcement from Saint Peter’s the decision was a mutual one made by the leadership of both organizations.
“After careful consideration by leadership, the Saint Peter’s Board of Governors, and the Most Reverend James F. Checchio, Bishop of the Diocese of Metuchen, and sole corporate member of Saint Peter’s, we have decided to terminate the Definitive Agreement to fully integrate with RWJBarnabas Health,” Leslie Hirsch, president and chief executive officer of the New Brunswick-based provider said in a statement. “We are very disappointed with this outcome. However, we are grateful for the strong partnership we’ve had with the RWJBarnabas leadership.”
“This difficult decision was not reached lightly,” RWJBarnabas Health CEO Barry Ostrowsky said in a statement. “We are disappointed in the termination of the proposed transaction, which we believe would have transformed quality, increased access and decreased overall cost of care for the people of this state through the creation of a premier academic medical center.”
At the beginning of the month, and following state approval garnered in May, the FTC filed a suit to block the deal, which would have established “the first premier academic medical center” in the state.
“Despite the loss of this opportunity, RWJBarnabas Health remains resolute in its commitment to serve the people of New Jersey – especially those who reside in our most vulnerable, chronically underserved communities – and shall continue to do so,” Ostrowsky added.
For Saint Peter’s, the now defunct deal marks the end of a process that began back in 2018 with a Request for Proposal seeking a strategic partner that was “best suited to help the organization maintain its rich Catholic mission and identity in an increasingly changing and competitive health care market.” RWJBarnabas has some experience in that regard, having added Trinitas Regional Medical Center to its roster at the beginning of the year.
RWJBarnabas and Saint Peter’s signed a definitive agreement with the intent to merge in September 2020, less than a year after entering into a non-binding letter of intent to a explore potential partnership.
When it moved to block the deal, the FTC said the RWJBarnabas-Saint Peter’s merger would create an entity with a grasp on 50% of the acute care market in Middlesex County. “Saint Peter’s University Hospital is less than 1 mile away from RWJ in New Brunswick, and they are the only two hospitals in that city,” FTC Bureau of Competition Director Holly Vedova said in statement at the time. “There is overwhelming evidence that this acquisition would be bad for patients, because the parties would no longer have to compete to provide the lowest prices and the best quality and service.”
What happens next, remains to be seen.
“We were truly excited about the potential of this opportunity with RWJBarnabas to create a premier academic medical center of national distinction that would have improved quality and increased access especially to the most vulnerable in the communities we serve,” Hirsch added. “We are now assessing the best way to move forward as we consider potential options to ensure Saint Peter’s longstanding Catholic healthcare mission.”
Editor’s note: This story was updated at 5:22 p.m. EDT on June 14, 2022, to include remarks from RWJBarnabas Health and additional information regarding the prop0sed agreement between it and Saint Peter’s Healthcare System.