Bureau of Competition Director Issues Statement on FTCs Closure of its Investigation of Consummated Hospital Merger in Temple, Texas

Richard Feinstein, Director of the Federal Trade Commission’s Bureau of Competition, has issued a statement on the agency’s decision to close its investigation into a consummated hospital merger in Temple, Texas. The Bureau is issuing this statement in the interest of transparency, to explain the unique circumstances of this case, and to commend staff and Scott & White for their creative approach to resolving the issues in this matter.

The statement, which can be found on the FTC’s Web site and as a link to this press release, summarizes the Commission’s investigation into Scott & White Healthcare’s merger with King’s Daughters Hospital earlier this year. As the statement explains, the Bureau had concerns with the likely competitive effects of the merger. The Bureau recognized, however, that, because of King’s Daughters Hospital’s precarious financial condition, it likely could not continue as an independent competitor. Therefore, the determinative issue in this investigation was whether there was a viable alternative purchaser that would not pose a danger to competition.

To resolve that issue, FTC staff entered into an agreement with Scott & White in which Scott & White would offer to sell King’s Daughters Hospital to the Seton Family of Hospitals, the most likely alternative purchaser, on specific terms. After seriously considering the offer, Seton declined. Under the circumstances, Seton’s decision left Scott & White as the only viable acquirer of the King’s Daughters Hospital assets, and accordingly, the FTC closed the investigation.

The Commission vote to close the investigation was 4-0.

(FTC File No. 091-0084)
(Scott & White.final.wpd)