Blog: Federal documents shed light on Renown
Consolidation is occurring everywhere in healthcare. Without the involvement of public shareholders' or taxpayers' dollars, private companies have become very private about how much they're spending on their latest acquisition—unless the deal lands in court.
With a recent two-week ordeal of trying to find out how much the Veterans Affairs Department was paying Microsoft for equipment and services still fresh in my mind ($77 million in the coming fiscal year, by the way), I read with interest the antitrust complaints (PDF) filed by the Federal Trade Commission and the Attorney General of Nevada against Renown Health after it gained control of 88% of the cardiology business in the Reno, Nev., market.
In case anyone was wondering what the going rate was for cardiology practices in a 320,000-person market like Nevada's Reno-Sparks region, the court documents reveal what Renown spent.
It paid $3.4 million to acquire Sierra Nevada Cardiology Associates and its free-standing cardiac catheterization laboratory in November 2010 and it subsequently hired 15 of its cardiologists.
This was followed by the March 2011 acquisition of Reno Heart Physicians for $4 million and the subsequent hiring of 17 of its cardiologists—including 16 who practiced in Reno and one in nearby Carson City.
What caught the FTC's attention, however, was not the price the docs received—but the price they paid: Two-year agreements not to compete within 50 miles of Renown's Nevada Heart Institute or, if they did, face a $150,000 penalty plus one year's salary or $750,000, whichever is greater.
Renown has noted that the cardiologists approached it, so the company did not initiate the practice acquisitions and, in the proposed agreement with the FTC, the company admits to no wrongdoing.
Follow Andis Robeznieks on Twitter: @MHARobeznieks.