Amid the excitement over the completion of the Columbia Healthcare Corp./Hospital Corporation of America deal, Columbia quietly settled its dispute with the Federal Trade Commission over its ill-fated Florida hospital swap with Adventist Health System/Sunbelt.
The settlement, issued by the FTC last month in a proposed consent agreement, bars Columbia, now Columbia/HCA Healthcare Corp., from acquiring any hospitals in Charlotte County, Fla., for 10 years without prior approval from the FTC.
The new company, which has built itself into the largest for-profit hospital chain in the country, now faces restrictions on acquisitions in at least six counties. All of the counties are located in the Southeast; two are in Florida.
However, few other hospitals operate in most of the counties, so the restrictions likely won't have any substantial effect on the chain, which now owns 192 hospitals in 26 states.
Before Columbia merged with Galen Health Care last August, it agreed to a hospital swap with Orlando, Fla.-based Adventist.
In the non-cash deal, Adventist would have given Columbia its hospital in Punta Gorda., Fla., 166-bed Medical Center Hospital. Columbia, in turn, would have given Adventist its hospital in Kissimmee, Fla., 120-bed Kissimmee Memorial, and two other unrelated facilities.
The FTC challenged the swap in February 1993, arguing that the deal would give Columbia illegal control of two of the three hospitals in Charlotte County. Columbia owned 254-bed Fawcett Memorial Hospital in Port Charlotte, Fla.
Faced with the FTC challenge and an order from a federal judge barring the deal until the antitrust complaint was resolved, the two parties scrapped their transaction. In the proposed consent agreement issued Feb. 8-the same day the FTC cleared the Columbia/HCA deal-Columbia agreed not to acquire another hospital in Charlotte County for 10 years without prior agency permission.
Meanwhile, during the legal proceedings surrounding the Punta Gorda swap, Columbia announced its plans to merge with Galen. That deal would have given the companies control of the only two hospitals in Kissimmee and two of the three hospitals in Osceola County. Galen owned 169-bed Osceola Regional Hospital in Kissimmee.
The FTC cleared the Columbia/Galen deal after Columbia agreed to divest its Kissimmee hospital. It later sold the hospital to Adventist, which was one of the parties in the original swap.
Under an August 1993 proposed consent agreement, Columbia agreed not to acquire another hospital in Osceola County for 10 years without prior FTC approval.
Then, Columbia proposed merging with HCA. On Feb. 8, the FTC cleared the deal but required the merging companies to divest HCA's 183-bed hospital in Aiken, S.C., Aiken Regional Medical Center. The FTC said the merger would give the companies illegal control of two of the market's five hospitals. Columbia owned 292-bed Augusta (Ga.) Regional Medical Center.
The proposed consent agreement also bars Columbia from acquiring any hospitals in the market for 10 years without agency approval. The market, according to the FTC, includes Richmond County and Columbia County in Georgia, and Aiken County in South Carolina.
By merging with HCA, Columbia also faces similar restrictions in Tennessee. In 1985, the FTC ordered HCA to divest two hospitals in Chattanooga, Tenn., and drop its management contract of a third after the company gained control of five of the city's 11 hospitals at that time.
The order also barred HCA from acquiring another hospital in Hamilton County, Tenn., without prior FTC approval, which it gave when it cleared the Columbia/HCA merger. HCA operates 235-bed HCA Parkridge Medical Center in Chattanooga, and Columbia owns suburban 128-bed East Ridge (Tenn.) Hospital.