On September 1st, the Fairfield Medical Center in Lancaster, Ohio, now bears the name “Adena” in addition to its public name, but most people in central Ohio likely didn’t notice this change.
The sale of another independent hospital to a large healthcare group is almost routine. Such occurrences happen one to two times every week for over a decade now.
However, the Federal Trade Commission (FTC) Chairman Andrew Ferguson made a statement the next day, indicating that his agency had intervened to prevent the sale of the hospital to another larger hospital group. If the acquisition had gone through, the hospital group would have dominated the market in that area.
Ferguson wrote, “Just because a financially troubled hospital has a similarly strong competitor willing to acquire them does not justify the risk of the potential harm to patients and healthcare workers that would have been illegal.”
At first glance, this story is about consumer protection and successful government regulation. But it also reveals the strategies pointed out by regulators and researchers that may weaken hospital market competition and drive up prices. Additionally, it highlights the financial struggles faced by independent hospitals, with record high closures in recent years.
Operating as a non-profit entity since its founding in 1916 as the Lancaster City Hospital, the Fairfield Medical Center had been seeking a buyer by 2024.
CEO John Janoso Jr. interpreted this move as a strategic adjustment to the changing demographics in the region. He mentioned that joining a larger healthcare group like OhioHealth would help independent hospitals plan for a successful future.
By joining a larger group, Fairfield Medical Center would have the ability to expand facilities, offer more services, and keep up with the influx of new residents in the area.
Financial records from the IRS showed that the financial condition of Fairfield Medical Center was deteriorating. Despite consistent revenue growth over the years, expenses were increasing at a faster rate. By 2023, net income had dropped by 88%, and assets decreased by over $43 million.
Over the years, financially struggling independent hospitals have been continuously acquired by larger healthcare groups, a trend that has intensified over the past decade.
Part of the reason for this trend seems to stem from the passage of the Affordable Care Act (ACA) in 2010, bringing influx of funds through new and expanded federal healthcare programs.
The ACA led to the expansion of Medicaid eligibility, resulting in a surge of $53 billion in Medicaid spending within a year of the law going into effect, more than triple the average annual growth rate of the past decade.
The ACA also added $180 billion in spending, with Medicaid spending growing to almost $117 billion in the decade after the law’s enactment.
Additionally, by expanding the coverage of Medicaid, some hospitals were able to profit from a federal law that allowed them to purchase prescription drugs at steep discounts and resell them at retail prices.
With increasing pharmaceutical sales and hospital mergers (acquisitions of hospitals, physician practices, and surgical centers), larger healthcare groups have seen a significant rise in revenue.
By 2024, hospital spending in the United States nearly doubled since the signing of the ACA. However, the alarming rate of closures of independent hospitals remains a concern.
Between 2010 and 2023, over 300 hospitals closed, and more hospitals discontinued services such as obstetrics and childbirth.
Additionally, over 1,200 healthcare companies were acquired by large healthcare groups.
Janoso described the agreement reached between Fairfield Medical Center and OhioHealth as a collaboration with a “proven, reliable partner.” OhioHealth holds ownership in 19 hospitals in the region.
Public records refer to this agreement as an acquisition, explaining why this acquisition can be seen as a vital financial lifeline for Fairfield Medical Center.
When one hospital acquires another, both parties must submit a notice to the FTC, including transaction details, financial statements, and market analysis.
During the review of the deal between Fairfield Medical Center and OhioHealth, the FTC and the Ohio Attorney General’s office identified some red flags.
Firstly, OhioHealth already operates twelve hospitals in the greater Columbus area, one of which is in the same county as Fairfield Medical Center. The conclusion drawn by the FTC and Ohio Attorney General’s office was that OhioHealth might raise medical costs and lower the quality of care by acquiring another hospital.
They were also interested in how much effort Fairfield Medical Center had put into finding potential buyers. Ferguson stated that while being acquired by larger companies could be beneficial for financially troubled hospitals, Fairfield Medical Center accepting acquisition by OhioHealth might have been hasty. The FTC advised Fairfield to reconsider other options.
The FTC does not have the authority to unilaterally block the sale of a hospital. As a last resort, the agency can request a court order to halt the sale. However, most of the FTC’s authority is informal.
The FTC publicly expressed that they had encouraged Fairfield Medical Center to invest more effort in marketing themselves to potential buyers.
Kirat Kharode, a former healthcare executive with over twenty years of hospital leadership experience, mentioned, “the subtler approach taken by the FTC could be the most critical factor in the whole event.”
“The change in outcome is a result of regulatory pressure and procedures, rather than a restraining order obtained through litigation. This distinction is truly paramount,” Kharode told the Epoch Times.
Fairfield Medical Center indeed reevaluated the situation and eventually terminated the negotiations with OhioHealth, instead reaching an agreement with Adena Health, a group based in Chillicothe, Ohio, which owns four hospitals.
A lingering mystery is the extent of the FTC’s “encouragement” as evidenced in public records.
The FTC, Adena Health, and OhioHealth all declined interview requests from this publication. While unconfirmed, public records suggest that the federal and state governments may have exerted more direct pressure on at least one of the parties.
On September 1st, as Fairfield Medical Center officially joined Adena Health, the signing ceremony was filled with joy and handshakes, symbolizing a new beginning for all involved.
“We are honored to welcome patients, family members, the community, healthcare providers, and nurses of Fairfield Medical Center into the Adena family,” said Adena Health CEO Kathi Edrington in a video obtained by the Epoch Times.
It seemed like a perfect conclusion to the story.
However, from the initial agreement between Fairfield Medical Center and OhioHealth to the final deal with Adena Health over the two-year period was filled with challenges.
In February 2026, while the proposed deal between Fairfield Medical Center and OhioHealth was still valid, the U.S. Department of Justice and the state of Ohio filed a lawsuit against OhioHealth, accusing them of anticompetitive practices.
The lawsuit alleged that the company maintained high hospital fees by issuing restrictive contracts to insurance companies which prevented informing patients of lower-cost healthcare providers in the area.
OhioHealth denied any wrongdoing.
A report by the National Academy for State Health Policy based in Maine described several strategies used by large healthcare companies. The lawsuit filed by the DOJ and Ohio accused OhioHealth of adopting some of these strategies.
One strategy described in the report is insisting on “all-or-nothing” contract terms during negotiations with insurance companies. This forced insurers to include all hospitals from that healthcare group in their network, or none at all.
Another strategy coerced insurers to include hospitals from the healthcare group in the most favorable cost-sharing category, regardless of their price or service quality. This practice was said to incentivize patients to choose that hospital group, potentially raising costs for insurers or lowering service quality.
The report also mentioned two other strategies – “anti-steering clauses” and “gag clauses,” which could prevent insurers from steering patients to lower-cost healthcare facilities or mentioning them.
This distorted negotiation between healthcare providers and insurance companies directly increases costs for states, employers, and patients.
Since 2018, at least six healthcare companies have faced state or federal lawsuits over alleged anticompetitive behavior.
According to data from Yale University’s Healthcare Affordability Lab, Columbus, Ohio, and its surrounding areas (including Lancaster) represent a “highly concentrated” hospital market.
The FTC identified Fairfield Medical Center as a direct competitor to OhioHealth, including a hospital that OhioHealth constructed in Fairfield County in 2023, setting up competition.
Martin Gaynor, an economics professor at Carnegie Mellon University in Pennsylvania, indicated that research on hospital mergers generally suggests that when competing hospitals merge, it tends to raise healthcare prices rather than lower them.
“Evidence shows that lack of competition affects the quality of medical care for patients,” Gaynor said during testimony to Congress in 2019.
These investigations mainly address overall issues with hospital mergers and do not specifically demonstrate harm to individual patients from the alleged actions of OhioHealth.
Six days after the DOJ filed suit against OhioHealth, the Becker’s Hospital Review reported that Fairfield Medical Center planned to close a surgical center and a sleep center, as part of cost-cutting measures.
The decision to cease these services at Fairfield Medical Center was attributed to financial pressures.
On June 1st, Fairfield Medical Center announced it had signed a letter of intent with Adena Health for acquisition.
Approximately two weeks later, the Ohio Attorney General announced a proposed settlement regarding the lawsuit against OhioHealth.
Under the proposed terms, OhioHealth would not have to admit any wrongdoing or pay fines but would be prohibited from enforcing contracts that inhibit insurers from disclosing pricing information of healthcare providers to patients or steering patients to lower-cost healthcare services.
With the resolution of the lawsuit, both parties seemed hopeful for the future.
“We fully support Fairfield’s choice to join forces with other partners and are grateful for their past cooperation,” OhioHealth said in a statement provided to the Epoch Times. “We wish them and their community continued success.”
On the other hand, the tone from Daniel Guarnera, the Director of Competition at the FTC, seemed less relaxed in his personal statement after the completion of the Fairfield-Adena deal.
“The Commission will remain vigilant, maintaining competition in the healthcare sector, especially during reviews of merger transactions involving hospitals providing services to rural communities,” Guarnera said.
The announcement today should be a reminder that we will prevent unreasonable hospital deals.
Following the settlement of the lawsuit, OhioHealth also appears optimistic.
“We fully support Fairfield’s decision to join hands with other cooperatives and are grateful for our previous collaboration,” the company said in a statement provided to the Epoch Times. “We wish them and their community continued success.”
As Fairfield-Adena’s transaction has been settled, all involved seem optimistic about the future.
“Today, we celebrate our achievements together, and tomorrow, we will usher in a stronger future for local healthcare,” Edrington said on September 1st.
Janoso announced in August that he would resign after the completion of the transaction.
In a statement to The Columbus Dispatch, Janoso said, “I believe this proposed collaboration with Adena Health is the path we should follow.”
“I believe they will continue our legacy while helping us achieve greater things.”
With the lawsuit resolution, OhioHealth also appears optimistic.
“We fully support Fairfield’s decision to join hands with other cooperatives and are grateful for our previous collaboration,” the company said in a statement provided to the Epoch Times. “We wish them and their community continued success.”
The future seems bright for all parties involved, but the journey to get there was fraught with challenges and legal scrutiny.