Hill-Rom Facing Antitrust Class Action Lawsuit Over Alleged Hospital Bed Monopoly

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A Pennsylvania hospital alleges in a proposed class action lawsuit that Hill-Rom has over the last two decades flagrantly violated federal antitrust law on its way to becoming the dominant supplier of hospital beds in the United States.

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The 51-page lawsuit says Hill-Rom, an alleged “serial abuser of antitrust laws,” has paid more than half a billion dollars in settlements to customers and competitors in the last 20 years over “repeated, flagrant violations” of federal law while aiming to leverage its apparent hospital bed monopoly via myriad “exclusionary and anticompetitive tactics.” 

According to the antitrust lawsuit, Hill-Rom, on or around January 1, 2013, began an effort to systematically exclude competition and competitors’ products from the market, namely by wielding its market power to impose on hospital systems long-term, exclusive “corporate enterprise agreements” and other exclusionary contracts. These agreements prevent hospital systems and their constituent hospitals from contracting with other hospital bed suppliers, the case summarizes.

“By unlawfully exploiting its monopoly power to exclude competition, Hill-Rom has foreclosed would-be rivals from being able to discipline Hill-Rom’s monopoly power and pricing, and thereby Hill-Rom has been able to charge, and has charged, supracompetitive prices to Plaintiff and similarly situated hospitals for hospital beds,” the proposed class action charges.

The largest product segment in the U.S. hospital bed industry is the standard hospital bed segment, which is comprised of roughly 666,000 standard hospital beds used for the majority of admitted non-critical patients in hospitals nationwide, the suit shares. The second largest segment is intensive care unit (ICU) beds, with birthing beds marking the third-largest segment in the nationwide hospital bed market, the filing states.

The plaintiff, the 697-bed Reading Hospital in West Reading, Pennsylvania, alleges Hill-Rom controls an at least 75 percent market share for standard hospital beds in the U.S. and has represented in recent years that it possesses a base of more than 500,000 hospital beds nationwide. Similarly, Hill-Rom’s market share for ICU beds nationwide exceeds 70 percent of the installed base, the relevant measurement in the fluctuating hospital bed market, the suit says.

For birthing beds, Hill-Rom enjoys more than 70 percent control of market share in the U.S., the complaint adds.

According to the case, Hill-Rom’s hospital bed market share is so strong that the company has been able to drive change in customer contracting practices to its advantage, and the defendant’s gross profit margins have increased steadily over the last decade, thanks in part to its ability to increase the prices it charges customers.

“Over the past decade, there has not been a single significant competitor to enter the Relevant Markets,” the filing relays.

Hill-Rom has allegedly wielded long-term exclusive agreements to keep potential entrants out of the market and “significantly narrow the portion of the market” available to newcomers, “often leaving competitors free to feed only on the crumbs that fall from Hill-Rom’s table.” The defendant has also been supremely protective of the intellectual property and technology of its hospital bed systems, with hundreds of patents it enforces aggressively, the suit says.

“Even if an incumbent believes it has a truly unique product, there is always a risk that its rollout will get entangled in contentious litigation as Hill-Rom seeks to protect its market position. Patent lawsuits that tie up the rollout of key products have the potential to be major barriers and even a death knell to potential entrants.”

The Hill-Rom antitrust lawsuit looks to cover all direct purchasers of standard, ICU and/or birthing hospital beds from Hill-Rom since at least June 20, 2020.

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