Attorney General Challenges Penn State Hershey Merger

Back in March, the Penn State Board of Trustees voted in favor of a proposed merger of the Hershey Medical Center with the PinnacleHealth System. 

The plan would form a “new health enterprise under the umbrella of Penn State Health,” but it required approval from the state attorney general and the Federal Trade Commission to finalize the merger.

Pennsylvania attorney general Kathleen Kane announced today that she — along with the FTC — is opposing the merger and will file in federal court tomorrow seeking a temporary restraining order and preliminary injunction. 

Kane is arguing that the two largest health care providers in the greater Harrisburg area merging would be detrimental to patients in the region. 

“We have learned the hard way in Pittsburgh what happens when a health system has a large market share,” Kane said in a press release. “The continued competition between Pinnacle and Hershey will ensure that the greater Harrisburg area will continue to have a vibrant and competitive health care market.”

According to the complain filed by the FTC, which Kane will officially join tomorrow, the merger of Hershey and Pinnacle would create an entity that controls 64 percent of the regional health care market, “likely leading to increased healthcare costs and reduced quality of care for more than 500,000 local residents and patients.”

The FTC complaint alleges that Pinnacle and Hershey currently “compete vigorously” on health care price, quality of care, and diversity of services provided. In Dauphin County, for example, Hershey and Pinnacle collectively operate the county’s only three hospitals.

Penn State was not immediately available for comment on Kane’s announcement and the future of the proposed merger.