HCA Healthcare Completes $1.5 Billion Acquisition of Mission Health, Ending Its Monopoly Status

VCBeat (WeChat Official Account: vcbeat) has learned that, due to reduced regulatory intervention, HCA Healthcare recently completed its $1.5 billion acquisition of the non-profit healthcare provider Mission Health in less than a year after signing the letter of intent.

HCA Healthcare, the first for-profit healthcare organization in the United States, was founded in 1968 and is headquartered in Nashville, Tennessee. Currently, HCA Healthcare operates 185 hospitals across 21 states, with its business presence also extended to North Carolina. Mission Health, a major hospital system based in Asheville, North Carolina, represents the largest nonprofit healthcare acquisition by HCA Healthcare since it purchased nine hospitals in Kansas City, Missouri, for $1.1 billion in 2003.

It is reported that this acquisition means Mission will invest $15 million into each of its six hospital-level foundations, one of which was established for Angel Medical Center. These foundations will be affiliated with HCA Healthcare and will no longer be able to provide financial support to hospitals under Mission. Instead, they need to realign their strategies to meet community needs.

Furthermore, the transaction has raised concerns among local residents in Asheville, North Carolina, with many fearing that hospital giant Mission Health would raise prices and close rural hospitals and associated service outlets. To alleviate these concerns, HCA Healthcare agreed to a series of commitments, including keeping local rural hospitals open for 10 years and establishing a 120-bed inpatient unit focused on behavioral health in Asheville.

Under the agreement reached by both parties, Mission Health will adopt HCA Healthcare’s charity care policy. The official website of an HCA-affiliated hospital describes it as “a more expansive charity policy designed to reduce patient financial obligations.” The term “patients” referred to on the website largely denotes individuals with annual incomes between 201% and 400% of the Federal Poverty Level (FPL) who have medical bills exceeding $1,500. Under this policy, in most cases, patients with annual incomes ranging from 0% to 200% of the FPL will have their medical expenses waived. (As of 2019, an annual income of $24,980 for a single-person household corresponded to 200% of the FPL, while $49,960 corresponded to 400% of the FPL.)

“This will be a turning point for community-based medical services,” said Dr. Ronald Paulus, CEO of Mission Health, in a statement. “We have not only secured the long-term sustainability of high-quality healthcare and support for rural communities, but also established the largest healthcare foundation in the nation on a per capita basis to address the social determinants of health.”

HCA Healthcare has committed to establishing a new alternative hospital for Angel Medical Center in Franklin, North Carolina. Additionally, it will create a $25 million innovation fund dedicated to improving the quality of healthcare services and stimulating economic development.

Barak Richman, a law professor at Duke University, holds a different view on the acquisition. In his opinion, Mission Health could have established a local monopoly through government agreements; now that this opportunity has passed, Mission Health is “selling its monopoly position to a for-profit entity.”

Richman stated that HCA Healthcare’s market strategy tends to focus strictly on hospitals rather than outpatient physician services, which is not a positive sign for the industry’s current shift toward disease prevention and care. Unfortunately, one of the “real tragedies” in North Carolina is the lack of high-quality, low-cost outpatient services. In some counties, hospitals are the only option, yet they are expensive and provide substandard care. “For HCA Healthcare, the ‘H’ stands for Hospital, not Healthcare,” Richman said. “I am not sure whether this merger will bring about a change—perhaps it will.”

HCA Healthcare is the first for-profit healthcare organization in the United States, founded in 1968 and headquartered in Nashville, Tennessee. Currently, HCA Healthcare operates 185 hospitals and 119 freestanding surgery centers across 21 states, including freestanding emergency rooms, urgent care centers, and physician clinics. HCA went public on the New York Stock Exchange in 1969 and subsequently achieved significant growth over the next two decades.

Mission Health, located in Asheville, North Carolina, is the state’s sixth-largest health system. Serving most of western North Carolina, Mission Health employs more than 10,600 staff members and engages 2,000 volunteers.

(Compiled by Ning Chen)