The Federal Trade Commission is taking a hard look at the affiliation that's been proposed between the two largest hospitals in Providence, R.I.
The board chairmen of Rhode Island Hospital and Miriam Hospital said last week in a joint statement that the FTC had issued a second request for information on the consolidation. A second request typically signifies a high-level antitrust probe.
The two hospitals announced on Dec. 28, 1993, their intention to consolidate as subsidiaries of a new parent holding company, each electing an equal number of directors to the new corporation.
The consolidated healthcare organization would control 60% of the inpatient acute-care beds in Providence and 27% of total beds in the state, according to figures published by the American Hospital Association.
To counter that market concentration, the venture would have to show efficiencies of operation and benefits of consolidation that could be translated to post savings for consumers. Pre-merger filings with the FTC tallied the dollar value of general efficiencies, said Norman Orodenker, general counsel for Miriam, but he did not disclose the figure.
The economic savings that would result from consolidating services and eliminating duplication are still being analyzed, he said.
The request for additional information "was not expected, given the size of the endeavor," according to the statement issued by Maurice Glicksman, chairman of Miriam's board of directors and its corporation, and Scott Laurans, chairman of Rhode Island Hospital's board.
The statement said the hospitals would "work speedily to comply with the information request and will be in position to move forward once the commission has made its final decision."
The FTC would neither confirm nor deny the existence of the investigation.
By itself, Rhode Island Hospital controls 47% of the acute-care beds in Providence and 19% of the beds in the state.