Columbia/HCA Healthcare Corp. has agreed to divest an Alaska outpatient surgery center to settle Federal Trade Commission charges that its acquisition of Medical Care America would reduce competition in the Anchorage market.
The agreement last week was the final hurdle in the Louisville, Ky.-based company's deal to buy the nation's largest outpatient surgery center chain. Shareholders of Dallas-based Medical Care approved the $850 million deal earlier this month (Sept. 5, p. 16).
FTC officials said the case is the first time a federal antitrust agency has challenged a merger involving outpatient surgery centers.
Columbia/HCA, a 197-hospital chain, owns Alaska Regional Hospital in Anchorage. Medical Care operates Alaska Surgery Center in Anchorage. The FTC said Columbia/HCA's control of both facilities "could result in higher prices or reduced quality for outpatient surgery" in the area.
Under the agreement, Columbia/HCA has agreed to sell the surgery center within 12 months and manage it until the sale is completed. Columbia/HCA also will need FTC approval to buy an interest of $1 million or more in any outpatient surgery center in Anchorage.
Meanwhile, Columbia/HCA has signed a letter of intent to buy Saint Francis Hospital in Charleston, W.Va.
The 200-bed hospital is sponsored by the Sisters of Saint Joseph of Wheeling, W.Va., which also owns 277-bed St. Joseph's Hospital in Parkersburg, W.Va. That hospital is not part of the Columbia/HCA deal.
Terms of the acquisition were not announced. However, Saint Francis Hospital has $57.7 million in debt that may have to be repaid as part of the deal.
This is Saint Joseph's second proposed acquisition agreement this year. In May, the hospital signed a letter of intent with the city's largest hospital, 818-bed Charleston Area Medical Center.
However, talks broke off in July. That deal would have given Charleston Area Medical Center 90% of the acute-care beds in a city of approximately 55,000 residents, according to American Hospital Association figures.
Although that could have raised legal problems with the FTC, Saint Francis spokeswoman Virginia Crowe said negotiations didn't progress far enough to warrant antitrust scrutiny.