The Federal Trade Commission is conducting an antitrust investigation of a proposed hospital merger in Missouri that would give one owner control of three of the market's five hospitals.
Executives at the hospitals expressed confidence that the FTC will clear the deal of any anti-competitive problems, and they anticipated that the transaction will close by Nov. 1.
FTC officials wouldn't confirm or deny the existence of the investigation.
The participants in the transaction are 167-bed Freeman Hospital and 91-bed Oak Hill Hospital, both in Joplin, Mo. In March, the hospitals announced their plans to merge to form the Health SouthWest Alliance of Missouri.
Freeman and Oak Hill are two of the three hospitals in Joplin, a city of about 42,000 located in Jasper County. Joplin is 150 miles south of Kansas City, Mo., in southwest Missouri. The city's third hospital is 329-bed St. John's Regional Medical Center.
Freeman also owns 67-bed Freeman Neosho (Mo.) Hospital, located about 25 miles southeast of Joplin in Newton County. Newton County is adjacent to Jasper County. Freeman acquired the Neosho facility from a group of physicians last fall (Nov. 29, 1993, p. 28).
The market's fifth hospital is 68-bed McCune-Brooks Hospital in Carthage, which is in Jasper County.
Joplin, Neosho and Carthage are located in the same metropolitan statistical area that overlaps both counties.
A merger between Freeman and Oak Hill would give them control of three of the market's five hospitals and about 45% of the 722 staffed acute-care beds in the market, according to the latest staffed-bed figures from the American Hospital Association.
The hospitals filed their required pre-merger notification documents with the FTC in July, and on Aug. 19 the agency issued a so-called "second request" for detailed financial and utilization information from the facilities. A second request typically signals that a transaction is undergoing a thorough review by federal investigators for possible anti-competitive effects.
Kelby Krabbenhoft, Freeman's president and chief executive officer, said hospital representatives met with FTC officials on Aug. 23 and significantly narrowed the scope of the documents sought in the second request. He said the documents to be submitted to the agency focus on the future operations of the newly merged facilities.
Mr. Krabbenhoft said he expected the FTC to clear the deal, which he hoped would be consummated by Nov. 1.
All three hospitals involved in the transaction are profitable, according to the hospitals' figures and data from HCIA, a Baltimore, Md.-based healthcare information company.
This year, Freeman's two facilities are projecting a combined $4.5 million profit on total revenues of $71 million (See related story, p. 33). Oak Hill, meanwhile, earned $1.6 million on total revenues of $27.1 million in 1992, according to the latest data from HCIA.