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St. Joseph Medical Center
St. Joseph Medical Center

Ascension drops plans to sell Mo. hospitals to HCA

By Melanie Evans
Posted: February 3, 2014 - 3:00 pm ET

Antitrust regulators apparently scuttled a deal between two giant U.S. hospital operators for two Missouri hospitals, a sign, perhaps, of the Federal Trade Commission's increasing attention to healthcare antitrust matters.

Ascension Health, St. Louis, announced it had ended talks to exit the Missouri acute-care market with the sale of St. Joseph Medical Center, Kansas City, and St. Mary's Medical Center, Blue Springs, to HCA, Nashville, after prolonged review by the FTC.

“Unfortunately, after a lengthy FTC review process, it has become clear that a timely, supportive decision from the FTC will not be forthcoming,” said a statement released by Ascension Health, which owns 103 hospitals in 19 states and Washington, D.C.

Cyndi Fahrlander, a spokeswoman for Carondelet Health, an Ascension subsidiary that includes 191-bed St. Joseph and 131-bed St. Mary's, declined an interview request.

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The deal would have strengthened HCA's already significant position in the Kansas City area, where the for-profit chain operates 10 hospitals. Ascension Health touted that market clout as a benefit when it announced the possible sale last May. “Being a part of a system with a large local presence would strengthen Carondelet's position in this competitive market, which is critical to ensure the system's long-term success amidst the myriad of changes that are occurring as part of healthcare reform,” said Fleury Yelvington, Carondelet's president and CEO, in a statement released at the time.

It's unclear whether FTC officials believed that benefit would come at consumers' expense. Mitchell Katz, an FTC spokesman, declined to comment.

More obvious is the priority the agency has given to antitrust enforcement in healthcare. FTC Chairwoman Edith Ramirez stressed the agency's focus on the industry in a recent appearance before Congress.

HCA agreed last May to acquire both hospitals and other assets totaling $282.8 million, including two surgery centers and Carondelet subsidiaries in home health, physical therapy, physician services, cardiology and pharmacy.

Market clout ranks highly among reasons for Ascension Health to expand or exit a market, as highlighted by the Carondelet deal and Ascension's recent decision to walk away from acquiring a six-hospital California system.

An Ascension Health spokeswoman did not respond by deadline to a request for information about future plans for Carondelet.

“We are disappointed that all of the anticipated regulatory approvals have not been forthcoming,” said Rob Dyer, an HCA spokesman. “We were looking forward to getting this deal completed, but unfortunately this puts an end to our negotiations. We will continue our focus of providing high-quality healthcare to area residents with our existing facilities.” Dyer declined additional comment.

Follow Melanie Evans on Twitter: @MHmevans

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