Hospital Consolidation

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The Forceful Hand of the FTC at Work

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Editor’s Note :There may be disagreements over the relative clout of insurance companies and hospitals but there can be little disagreement over the clout of the FTC.

The following set of articles is drawn from a series of stories written by the Idaho Statesman; The articles are very informative in that they describe in non-technical terms the issues associated with mergers.

 The FTC goes head-to-head with a long time associate of the Editor when both worked in the Pentagon during the Johnson Administration; an individual who is nationally recognized as an expert in healthcare.

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Consolidation of Big Hospital Systems May Drive Healthcare Costs Even Higher, Say Some Experts

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Editor’s Note:  See this CRE study which debunks a number of the claims made in the following article.
 

DarkDaily.com

Recent hospital mergers are creating super-sized health systems that immediately gain leverage over insurers when negotiating managed care contracts

Experts say the nation is experiencing its biggest surge in hospital mergers in more than a decade. Moreover, this latest wave of deals is creating supersized hospital systems that are expected to dominate healthcare and possibly lead to higher healthcare costs.

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CHS says merger reviews unlikely to delay HMA takeover

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ModernHealthcare.com

By Beth Kutscher

 
Community Health Systems is saying it expects to close its acquisition of Health Management Associates on schedule despite additional action on two fronts that could extend the review period for the merger of the two investor-owned hospital systems.

The Franklin, Tenn.-based chain said in a news release that the Federal Trade Commission has requested additional documents related to the deal in what’s known as a second request

 
Community said it “anticipated” the FTC’s action and still expects to complete the deal in the first quarter of 2014. Community and Naples, Fla.-based HMA have overlaps in 15 states, including three—Alabama, Florida and Oklahoma—where they operate hospitals within 20 miles of each other.

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England’s Regulatory Authorities Going in a Different Direction than the FTC

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Financial Times

Competition ruling to make hospital mergers more likely

By Sarah Neville, Public Policy Editor

More hospital mergers are in prospect following an announcement on Thursday that will reduce the chance of lengthy referrals to the Competition Commission and, say supporters, ensure better use of scarce NHS resources.

The extent to which competitive pressures should be allowed in the National Health Service has been among the most contentious questions raised by the health reforms implemented in April.

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British Competition Commission to Reject Merger Notwithstanding the Fact that One of the Parties May Beginning Operating in the Red

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Daily Echo

HOSPITAL bosses at Bournemouth and Christchurch are expecting their planned merger with Poole to be barred.

A letter to staff, seen by the Daily Echo, says the Competition Commission is likely to reject the merger bid in a decision expected within days.

The chief executive of Poole has previously warned that his trust could slip into the red next year and be placed into administration if the merger did not go ahead.

Tony Spotswood, chief executive of Royal Bournemouth and Christchurch Hospitals NHS Trust, says in the letter to staff: “It is likely that an announcement will be made shortly on the proposed merger with Poole Hospital.

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FTC Healthcare Merger Retrospective Again?

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From: BakerHostetler

Article by Jonathan L. Lewis and Lee H. Simowitz

Two weeks into the FTC’s and Idaho AG’s antitrust trial challenging hospital system St. Luke’s Health System (“St. Luke’s”) acquisition of the Saltzer Medical Group (“Saltzer”) – a for-profit, physician-owned, multi-specialty group comprising approximately 44 physicians located in Nampa, Idaho – a lot more is at stake than just whether St. Luke’s eventually will be ordered to unwind its acquisition of Saltzer.

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“Reductions in Medicare and Medicaid reimbursements, new impending regulatory obligations……. make it progressively more difficult to keep pace with their competitors”

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Russ Zimmer

CentralOhio.com

 

Some of the most defining moments of life — surgery, the birth of a child, the death of a parent — occur every day in community hospitals around the state. But the fate of these hospitals and decisions on what services they provide are increasingly being decided in a board room in another city.

The hospital consolidation movement is back after a lull in transactions at the turn of the century. In Licking County, leadership at Licking Memorial Hospital is confident the 115-year-old hospital will retain its independence going forward.

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Don’t Count on it : “For-profit hospital mergers on the horizon”

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Editor’s  Note:  The  FTC  may have plans in store that differ from the outcome set forth in the following article.

 

New Haven  Register

By Mary E. O’Leary, moleary@nhregister.com,

 The universe of hospital care is fast evolving in Connecticut, with a giant for-profit system poised to take over a number of small community hospitals, while Yale-New Haven Health Systems is set to provide some clinical services beyond its current footprint.

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FTC Retrospective Review of Hospital Mergers: A Probable Action as a Result of Recent Appointments at OMB and the FTC

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Editor’s Note:  Howard Shelanski, the former head of the Bureau of Economics at the FTC, is the new Administrator of the Office of Information and Regulatory Affairs at the White House Office of Management and Budget and a strong proponent of retrospective review of regulation. His successor, Martin Gaynor, is an economist who spent a career in analyzing national healthcare issues.  The Editor knows of no two individual any more competent than these  gentlemen to oversee a retropsective review of hospital mergers.
 
Accolades to the authors of the following article when they get to core of the issue:
 
“The FTC’s revamped approach now “emphasizes how a merger can leave an insurer — the direct payor for hospital services — with few alternatives to include in its network, increase the bargaining leverage of the combined hospital, and lead to higher prices.”
 
Any retrospective review should include an analysis of a merger that has just been completed so as to minimize the effects of exogenous variables  during the evaluation; an excellent candidate is the recently completed merger  between the  Robert Woods Johnson Foundation University Hospital and the Somerset Medical Center.   In performing the analysis  the  FTC could review the many studies sponsored by the Robert Woods Johnson Foundation regarding hospital mergers, some of which violate the Data Quality Act.
 
CRE welcomes the views of  GW Law Students in the reply space below.
 
 
Published by:  Mondaq ( A favorite of the Editor)
 
 

Provider Healthcare Merger Retrospective On The Horizon At FTC — Again?

With the first week in the Federal Trade Commission’s (FTC) and Idaho attorney general’s antitrust trial challenging St. Luke’s Health System’s (St. Luke’s) acquisition of the Saltzer Medical Group (Saltzer), a for-profit, physician-owned, multispecialty group comprising approximately 44 physicians located in Nampa, Idaho, already in the books, a lot more is at stake than just whether St. Luke’s is eventually ordered to unwind its acquisition of Saltzer.

As reported previously, the FTC and Idaho attorney general are alleging that St. Luke’s acquisition of Saltzer is anticompetitive because it creates a single dominant provider of adult primary care physician services in Nampa, Idaho, with a combined share of nearly 60 percent. The newly-combined primary care practices, they allege, give St. Luke’s greater bargaining leverage with healthcare plans, with higher prices for services eventually being passed on to local employers and their workers. Other local hospitals contend that the combination may choke off their access to inpatient admissions referred by Saltzer physicians.

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“At the same time we’re seeing decreases in reimbursement, we’re also seeing an increase in bad debt and free care”

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Sun Chronicle

Andrew Rice arice@keepmecurrent.com

Bigger is just better,’ say hospital officials on merger

BIDDEFORD – The top officials at Goodall Hospital in Sanford and Southern Maine Medical Center in Biddeford reassured the public during a series of forums that the upcoming merger of the two facilities will expand health care in York County and improve both hospitals.

Beginning Jan. 1, 2014, the two hospitals will officially become Southern Maine Health Care, effectively making it the fifth largest health-care system in the state, with 2,200 employees.

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