State and federal regulators are stepping up antitrust scrutiny of Columbia/HCA Healthcare Corp.'s acquisition of Healthtrust, a deal that will make Columbia/HCA a 311-hospital chain with $15 billion in revenues.
Last week, the Federal Trade Commission made a "limited request" for additional information about the pending $5.6 billion deal to buy the Nashville, Tenn.-based hospital chain, Columbia/HCA said.
A spokeswoman for Columbia/HCA, a Louisville, Ky.-based chain of about 200 hospitals, said the FTC request was for information in certain markets, but she declined to identify them. She said the company believes the investigation will not delay the Healthtrust merger.
In addition, attorneys general in four states have begun their own investigations and have discussed working together to determine whether the merger would be anti-competitive.
Antitrust representatives from attorneys general's offices in Florida, Tennessee, Texas and Utah met in Nashville late last month to discuss the Columbia/HCA-Healthtrust merger. However, Mary Parker, a spokeswoman for the Tennessee attorney general's office, said she could not comment on the outcome of the meeting or on whether future meetings are planned.
However, statewide efforts are under way. In Texas, the attorney general began to subpoena documents. If the merger is completed as planned, Columbia/HCA would own 67 hospitals in Texas, more than any other state.
In Corpus Christi, Texas, 491-bed Spohn Health System has been contacted by both federal and state anti-trust investigators. The state subpoenaed four boxes of documents, said Sister Kathleen Coughlin, president of the Roman Catholic system.
In Corpus Christi, Columbia/HCA owns 271-bed Doctors Regional Medical Center, 132-bed Bay Area Medical Center, 68-bed Bayview Hospital and an outpatient surgery center. Healthtrust owns 82-bed Riverside Hospital as well as two nearby hospitals in Alice, Texas, and Aransas Pass, Texas.
"It's my understanding that they've contacted all the key players and the major payers," Sister Coughlin said of the FTC investigation. The commission investigated the Corpus Christi market when Columbia Hospital Corp. merged with Galen Health Care last year.
Sources said the FTC is examining 10 markets. In addition to Corpus Christi, regulators are expected to look at markets including Houston; Salt Lake City; Fort Myers, Fla.; Tampa/St. Petersburg, Fla.; the Florida panhandle; Nashville; Chattanooga, Tenn.; and Kingsport, Tenn.
In the Kingsport area, Columbia/HCA owns two hospitals and Healthtrust owns three.
Donna Miller, president and chief executive officer of Kingsport's business coalition, Tri-City Health Alliance, said she had been interviewed by Tennessee Deputy Attorney General Perry Craft. Ms. Miller referred questions about the investigation to Mr. Craft, who was not available for comment.
In some cases, regulators may be looking at statewide implications. "We've done an independent preliminary investigation," said David Kimmel, director of the public protection division of the Louisiana attorney general's office. He said his office wasn't looking at particular markets, but statewide effects. Columbia/HCA would own 20 hospitals in Louisiana after the merger.
Last month, the Florida attorney general's office said it was launching an investigation of the merger (Oct. 17, p. 4). In Florida, Columbia/HCA would control 26% of the state's 217 hospitals and 61% of the state's 92 investor-owned hospitals.