When Fairfield Medical Center in Lancaster, Ohio, added the word Adena to its masthead on Sept. 1, most people in Central Ohio probably didn’t notice.
The sale of yet another independent hospital to a larger health system is hardly noteworthy. It’s happened once or twice a week for more than a decade.
Yet Andrew Ferguson, chairman of the Federal Trade Commission, issued a statement the next day, saying his agency had intervened to discourage a previous sale to a different, much larger hospital system, which would have given that company market dominance in the region.
“The mere fact … that a close competitor is willing to buy the financially distressed hospital is not sufficient to justify an otherwise unlawful risk of harm to patients and healthcare workers,” Ferguson wrote.
At face value, this is a consumer protection story, government regulation gone right. But it is also a window into tactics that regulators and researchers say can reduce competition and increase prices in hospital markets. And it illustrates the financial plight of independent hospitals, which have closed in record numbers in recent years.
Fairfield Needed Help
Fairfield Medical Center has operated as a nonprofit since it opened as Lancaster Municipal Hospital in 1916.
But by 2024, the longstanding institution was searching for a buyer.
CEO John Janoso Jr. cast the move as a way to keep up with the region’s changing population. “Affiliating with a larger system often helps independent hospitals successfully plan for the future,” Janoso said in a statement at the time.
He noted that Fairfield was considering affiliation with OhioHealth, a regional hospital system headquartered in nearby Columbus.
That would allow Fairfield to add facilities and services, and keep up with the influx of new arrivals to the region, Janoso said.
IRS filings show a worsening financial picture. Revenue had increased for years, but expenses had grown faster. By 2023, net income after expenses had fallen 88 percent, and assets had declined by more than $43 million.
Independents Struggle
Struggling independent hospitals have been absorbed into larger health systems for years, a trend that gained momentum in the previous decade.
The phenomenon appears to have been fueled partly by the influx of money from new and expanded federal health programs after passage of the Affordable Care Act.
The act both created Obamacare and expanded the population eligible for Medicaid. When the law took effect in 2014, Medicaid spending shot up $53 billion in a single year—more than three times the average annual increase over the past 10 years.
Obamacare added another $18 billion, which grew to almost $117 billion over the next decade.
Also, thanks to expanded Medicaid, many hospitals became eligible to profit from a federal law that allows certain providers to buy prescription drugs at steep discounts and re-sell them at retail prices.
As drug sales grew and hospitals consolidated—acquiring hospitals, physician practices, and surgery centers—larger health systems captured more and more of that revenue.
By 2024, U.S. spending on hospital care had almost doubled since the Affordable Care Act was signed into law. Yet independent hospitals were closing at an alarming rate.
More than 300 hospitals were shuttered between 2010 and 2023. An even greater number stopped offering services such as maternity and childbirthing.
More than 1,200 others were bought up by larger healthcare corporations.
Janoso pitched the deal with OhioHealth, which owns or has an interest in 19 hospitals, as a collaboration with a “tried and true partner.”
Public documents refer to the deal as an acquisition. The filings also help explain why the acquisition could be viewed as a financial lifeline.
Regulators Take a Look
When one hospital acquires another, both must submit a notice to the FTC that includes details of the sale, financial statements, and market analyses.
When reviewing the Fairfield Medical Center–OhioHealth deal, the FTC and the Ohio attorney general saw some red flags.
For one, OhioHealth already operated 12 hospitals in the greater Columbus area, including one in the same county as Fairfield Medical Center. Adding another to its portfolio could raise costs and reduce the quality of care, the agencies concluded.
What’s more, they wondered how hard Fairfield had looked for a potential buyer. Ferguson said he recognized that being acquired by a larger company can be a good thing for cash-strapped hospitals. But did Fairfield settle too quickly? The agency wanted Fairfield to take another look at its options.
The Nudge
The FTC can’t unilaterally block the sale of a hospital. As a last resort, the agency can ask a judge to do so. But most of the FTC’s power is informal.
Publicly, the FTC said it had encouraged Fairfield to put more energy into marketing itself to potential buyers.
That subtler approach could be the most significant factor in this episode, said Kirat Kharode, a former healthcare executive with more than two decades experience in hospital leadership.
“The outcome changed because of regulatory pressure and process, not a litigated injunction. That distinction is arguably the real story,” Kharode told The Epoch Times.
Fairfield did take another look and eventually broke off negotiations with OhioHealth, settling on a deal with Adena Health, a four-hospital system based in Chillicothe, Ohio.
The public record leaves an open question: How strong was the FTC’s “encouragement”?
The FTC, Adena, and OhioHealth declined requests for an interview. The public record also raises, but does not establish, the possibility that the federal government and the state of Ohio exerted more direct pressure on at least one of the parties involved.
Action Against OhioHealth
When Fairfield Medical Center formally joined Adena Health on Sept. 1, the signing ceremony included lots of smiles and handshakes.
“We are very proud to welcome the patients, the families, the communities, providers, and caregivers of Fairfield Medical Center to the Adena family,” Edrington said in a video obtained by The Epoch Times.
Yet the two years between Fairfield’s initial agreement with OhioHealth and the closing with Adena Health were fraught with challenge.
In February 2026, with the proposed Fairfield–OhioHealth deal still in place, the U.S. Department of Justice and the state of Ohio filed a lawsuit against OhioHealth alleging anti-competitive practices.
The lawsuit alleged that the company kept hospital prices high by issuing restrictive contracts to insurance companies—contracts that, according to the suit, prevented insurers from informing patients about lower-cost providers in the area.
OhioHealth denied any wrongdoing.
The Playbook
The National Academy for State Health Policy report describes several tactics used by large medical companies. The lawsuit filed by the U.S. Department of Justice and the state of Ohio alleges that OhioHealth engaged in some of those practices.
The report says that providers with a dominant position in a marketplace can have leverage in negotiating contracts with insurance companies in ways that discourage competition.
One tactic the report describes is to insist on an all-or-nothing contract. That forces an insurer to include all of the health system’s hospitals in a network, or none of them, it says.
Another tactic, according to the report, is to force insurers to include the company’s hospitals in the best cost-sharing category regardless of the prices or quality of service. That can encourage patients to choose that hospital system, even though it may cost the insurance company more or offer lower-quality service, the report says.
The report identifies two other tactics—anti-steering and gag clauses—that can prevent insurers from directing patients to lower-cost providers, or even mentioning them.
“These types of distorted negotiations between providers and insurers directly contribute to higher costs for states, employers, and patients,” the report reads.
At least six other healthcare corporations have faced lawsuits from state or federal agencies over allegations of anticompetitive practices since 2018.
Impact on Hospitals, Patients
The region around Columbus, Ohio, which includes Lancaster, is a “highly concentrated” hospital market, according to data from the Healthcare Affordability Lab at Yale.
The FTC identified Fairfield Medical Center as a direct competitor to OhioHealth, including competition with the hospital OhioHealth built in Fairfield County in 2023.
Research on hospital consolidation generally suggests that consolidation between competing hospitals tends to raise, not lower, prices, according to Martin Gaynor, an economics professor at Carnegie Mellon University.
“Evidence shows that patient quality of care suffers from lack of competition,” Gaynor said in testimony before Congress in 2019.
These findings concern hospital consolidation generally and do not by themselves establish that OhioHealth’s alleged conduct caused harm to particular patients.
Six days after the Justice Department filed its lawsuit against OhioHealth, Becker’s Hospital Review reported that Fairfield planned to close a surgery center and a sleep center and lay off staff as part of a cost-reduction effort.
Fairfield attributed the decision to discontinue these services to financial pressure.
“The decision to discontinue these services was made as our organization … continues to face financial pressure due to reimbursement shortfalls, rising supply costs and ongoing workforce challenges,” Fairfield said in a statement, as reported by Becker’s.
On June 1, Fairfield announced that it had signed a letter of intent with Adena Health with an eye toward acquisition.
About two weeks later, the Ohio attorney general announced a proposed settlement of the OhioHealth lawsuit.
Under the proposed terms, OhioHealth would admit no wrongdoing and pay no fines. And it would be barred from enforcing contracts that prevent insurers from sharing information with patients about provider pricing or from steering patients toward lower cost care.
What’s Next?
Now that the Fairfield–Adena deal is resolved, all parties seem eager for the future.
“Today we celebrate what we’ve accomplished together, and tomorrow we begin with an even stronger future for local healthcare,” Edrington said on Sept. 1.
Janoso announced in August that he would resign after the deal was complete.
“I believe this proposed partnership with Adena Health is the path we are meant to follow,” Janoso said in a statement reported by The Columbus Dispatch.
“I am confident they will honor our legacy while helping us reach even greater heights.”
With the lawsuit settled, OhioHealth seemed optimistic, too.
“We fully support Fairfield’s decision to move forward with another partner and remain appreciative of their collaboration,” the company said in a statement provided to The Epoch Times. “We wish them and their community continued success.”
Sounding less relaxed was Daniel Guarnera, director of the FTC Bureau of Competition, who released his own statement after the Fairfield–Adena deal closed.
“The Commission remains vigilant in preserving healthcare competition, especially when reviewing deals involving hospitals that serve rural communities,” Guarnera said.
“Today’s announcement should serve as a reminder that we will stop bad hospital deals.”
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