Two hospital systems are expected to make a final decision this week on whether to fight the Federal Trade Commission's challenge of their acquisition plan, which involves the sale of three not-for-profit Utah hospitals to a for-profit chain.
Last week, Holy Cross Health Services of Utah, which operates the three hospitals, decided to fight the agency, said the system's attorney, Thomas Campbell of Gardner, Carton & Douglas in Chicago.
"We're confident we can beat the FTC," Mr. Campbell said.
However, the system, which is owned by South Bend, Ind.-based Holy Cross Health System Corp., was waiting to hear if HealthTrust-The Hospital Co. would go to court, he said.
Phillip Proger, who represents HealthTrust, declined comment. He's an antitrust attorney with Jones, Day, Reavis & Pogue in Washington.
Advocates of the deal contend the acquisition would be in the best interest of the community, arguing that it would improve efficiency and lower costs.
Under the challenged deal, HealthTrust, the Nashville, Tenn.-based investor-owned chain, would buy the hospitals from Holy Cross for an undisclosed price. The hospitals are Holy Cross Hospital of Salt Lake City, St. Benedict's Hospital in Ogden and Holy Cross Jordan Valley Hospital in West Jordan. HealthTrust also would acquire 10 Holy Cross outpatient clinics.
HealthTrust already owns six hospitals in Utah. Four of them are located in the same market as the Holy Cross facilities (See map).
In a statement announcing its decision last week, the FTC said the acquisition "would significantly decrease competition for inpatient acute-care hospital services in the Salt Lake City area."
The FTC's commissioners authorized the antitrust challenge on March 22 by a 3-1 vote. One commissioner didn't vote.
The commissioners instructed the agency to file a motion in U.S. District Court in Salt Lake City seeking a temporary restraining order and preliminary injunction that would block the deal pending the outcome of the FTC's antitrust complaint against the systems. At deadline, the agency had yet to file the complaint.
Mr. Campbell said the systems asked the FTC to delay filing their motion in federal court for seven days to give them time to make their decision.
In a statement issued after the FTC vote, executives from the systems said they were disappointed because the transaction would be in the best interest of the patients in the market.
The vote follows a four-month antitrust investigation by the agency that included interviews and reviews of documents from other hospitals in the market, including Intermountain Health Care, a Salt Lake City-based not-for-profit system. Douglas Hammer, Intermountain's general counsel, said the system is "neutral" on the HealthTrust-Holy Cross deal.
HealthTrust signed a letter of intent to buy the hospitals from Holy Cross last October and survived opposition from a Roman Catholic bishop in Salt Lake City who felt the Catholic system's assets shouldn't be sold to a for-profit, out-of-state company.
The vote also comes a week after the Justice Department settled antitrust charges that eight Utah hospitals and two healthcare associations conspired to fix the wages paid to entry-level nurses (March 21, p. 3).
Six of the eight hospitals named in the wage-fixing settlement are involved in the proposed transaction now being challenged by the FTC. Four are owned by HealthTrust; two are owned by Holy Cross. Legal experts said the evidence generated by the Justice Department could help the FTC argue that reduced competition in the Salt Lake City-area market could lead to collusion among the remaining hospitals or hospital companies.