Columbia/HCA Healthcare Corp. is shutting down one of the hospitals in a three-hospital monopoly in Florida that the Louisville, Ky.-based chain achieved through its merger with HCA-Hospital Corporation of America.
One of the concerns of federal antitrust enforcement officials regarding an acquisition of a competitor in any industry is whether the motive behind the acquisition is to eliminate competition by shutting down a competitor.
But the Columbia/HCA monopoly was exempt from federal antitrust scrutiny under the government's new healthcare antitrust enforcement guidelines, which automatically clear mergers involving one or more hospitals with fewer than 100 beds each.
Although the monopoly was exempt, the Federal Trade Commission made note of it when the agency cleared the Columbia/HCA merger earlier this year. One FTC commissioner questioned the wisdom of letting the monopoly go through (Feb. 14, p. 2).
The monopoly exists in Fort Walton Beach, Fla., in Florida's panhandle. Before the merger, Columbia owned 236-bed Fort Walton Beach Medical Center and 50-bed Destin (Fla.) Hospital, about seven miles east. HCA, meanwhile, owned 75-bed HCA Twin Cities Hospital in Niceville, Fla., 15 miles northeast of Fort Walton Beach.
Now, Columbia has decided to close the Destin facility effective May 23.
The closest non-Columbia hospital is 110-bed North Okaloosa Medical Center in Crestview, Fla., about 32 miles north of Fort Walton Beach.
In a May 9 statement, the chain said the inpatient operations at the 50-bed hospital will be transferred to the company's hospital in Fort Walton Beach. The Destin emergency department will remain open 24 hours a day.
A Columbia spokeswoman said low utilization, not the elimination of competition, was behind the decision to shut down inpatient operations at Destin. She said the hospital had an average daily census of 12 patients. Transferring inpatient operations to Fort Walton Beach will save Columbia $3.6 million annually, she said.
In 1992, the hospital lost $245,558 on total revenues of about $14.9 million, according to the latest available data from the Florida Agency for Health Care Administration.