Lee Memorial Hospital in Fort Myers, Fla., won the right to merge with Cape Coral (Fla.) Hospital last week after a federal appeals court ruled against the Federal Trade Commission's challenge of the proposed merger.
But the merger still isn't a done deal. The FTC has two weeks to decide whether to appeal to the U.S. Supreme Court the decision by the 11th U.S. Circuit Court of Appeals in Atlanta. And because it took more than three months for the appellate court to issue its ruling, 201-bed Cape Coral is reviewing four new acquisition proposals, including one from 602-bed Lee Memorial.
Robert McCurdy, Lee Memorial's general counsel, said the two hospitals will make a joint decision in the next several weeks on how to proceed. A Cape Coral representative was unavailable for comment at press time.
In October, Cape Coral mailed requests for proposals to about seven hospital groups. The board last week narrowed the list to four finalists. They are Lee Memorial, Columbia/HCA Healthcare Corp., Health Management Associates and Bon Secours Health System. Columbia/HCA owns two of the five hospitals in Lee County. HMA operates 148-bed Medical Center Hospital in Punta Gorda, Fla., and Bon Secours owns 212-bed St. Joseph Hospital in Port Charlotte, Fla.
Financially strapped Cape Coral has been losing about $1 million a month this year and is struggling under $175 million in debt and liabilities. Nervous bondholders and physicians on Cape Coral's medical staff put pressure on the hospital to seek another partner.
A Lee Memorial spokesman said another reason for his hospital to proceed more cautiously is the financial condition of Cape Coral.
In its lawsuit, the FTC had alleged Lee Memorial's planned acquisition of Cape Coral would give the combined organization a dominant 67% market share in the five-hospital Lee County market. If the merger were allowed, the FTC said, the result would be higher prices and fewer services to consumers.
However, the appellate court never addressed that issue. Instead, it issued a narrow ruling that Lee Memorial, as a public hospital, is exempt from antitrust laws under the state action doctrine. Under the doctrine, which was written by the U.S. Supreme Court in 1943, activities that are authorized by state law and actively monitored cannot be challenged on antitrust grounds.