The proposed acquisition of American Medical International by National Medical Enterprises has caused a not-for-profit Florida hospital to reconsider being acquired by or contracting with AMI.
Richard Cascio, president and chief executive officer of 369-bed JFK Medical Center in Atlantis, Fla., said his board ended exclusive discussions with AMI because it wanted to "wait and see what happens to the combined entity (of AMI and NME)." He said the hospital's trustees "felt it was prudent to take a step back."
The hospital's agreement to look at options ranging from managed-care contracting to an acquisition was signed in August, two months before the NME/AMI deal was announced.
Last week, Santa Monica, Calif.-based NME received federal antitrust clearance for the $3.3 billion acquisition of Dallas-based AMI. NME said the 30-day waiting period had expired without a request for additional information from the Federal Trade Commission. An FTC request for information typically triggers an antitrust investigation.
NME expects to complete the deal during the first quarter of 1995. The chain then will operate 84 acute-care hospitals in 13 states and four countries.
The merger had raised some antitrust issues because NME and AMI each operate three hospitals in the Miami/Fort Lauderdale area. JFK would have added to that total. In addition, AMI has an agreement with 406-bed South Miami Hospital, although that deal may prompt a dispute with Columbia/HCA Healthcare Corp. (Nov. 14, p. 4).
AMI officials said the agreement with JFK had expired but they were hopeful they could still work out a deal with the Palm Beach County facility. After AMI merges with NME, the company would have "an even stronger network in that area," noted Patti Monahan, an AMI spokeswoman.
With AMI at least temporarily out of the picture, JFK now is viewed as a prime acquisition target by Louisville, Ky.-based Columbia/HCA and others.
Despite JFK's decision, another proposed deal between a not-for-profit hospital and AMI is going forward. In September, AMI's Columbia (Mo.) Regional Hospital and 284-bed Boone Hospital Center, also in Columbia, entered exclusive discussions. Boone is part of the BJC Health System, St. Louis.