The Federal Trade Commission has given final approval to a consent agreement with Columbia/HCA Healthcare Corporation, settling charges that the company's $3 billion merger with Healthtrust, Inc. - The Hospital Company. would impair hospital competition -- leading to higher prices, reduced services, or both -- in six different geographic areas in the United States. The Commission action announced today makes the consent order provisions binding on Columbia/HCA.
Columbia/HCA is based in Nashville, Tennessee, as is Healthtrust, which now operates as a wholly-owned subsidiary of Columbia/HCA. The merger involved more than 280 hospitals nationwide and was the largest hospital merger in U.S. history.
The final order is designed to restore the competition allegedly eliminated by the merger. It requires Columbia/HCA to divest seven hospitals:
Under the consent order, these divestitures must be completed within 12 months (nine months for the Utah hospitals) to entities that will operate them in competition with Columbia/ HCA. Pending divestiture, Columbia/HCA must operate the hospitals to be divested separately from its other hospitals, and keep them marketable and viable.
The order also requires Columbia/HCA to terminate its participation in a joint venture with the Orlando Regional Health System, either by buying out Orlando Regional Health System's interest or selling Healthtrust's interest within six months. The joint venture operates South Seminole Hospital in Longwood, Florida, north of Orlando. The FTC had alleged that hospital competition in the Orlando area would be threatened if two major competitors in that market, Columbia/HCA and the Orlando Regional Health System, shared ownership of South Seminole Hospital.
In a modification of the provisionally-accepted consent agreement, the final order replaces a prior-approval requirement with a prior-notice provision that requires Columbia/HCA, for 10 years, to notify the FTC before acquiring another acute care hospital in any of the six markets at issue, and before transferring an acute care hospital in any of the areas to another entity that already operates one in that area. There is an exemption to these prior notice requirements for assets acquisitions or transfers valued at less than $1 million. In addition, the provisionally-accepted agreement would have required prior notification for certain nonmerger joint ventures, and that provision was deleted from the final order.
The consent agreement was announced for a public-comment period on April 21. The Commission vote to isue it in final form occurred on Oct. 3, and was 5-0.
NOTE: A consent agreement is for settlement purposes only and does not constitute admission of a law violation. When the Commission issues a consent order on a final basis, it carries the force of law with respect to future actions. Each violation of such an order may result in a civil penalty of up to $10,000.
A news release summarizing the complaint and consent agreement was issued at the time the Commission accepted the consent agreement for public comment. Copies of that release and of the complaint and final order are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web Site at: http://www.ftc.gov.
(FTC File No. 951 0022)
(Docket No. C-3619)