A hospital merger in Joplin, Mo., is back in the works despite objections from the Federal Trade Commission.
The board of 105-bed Oak Hill Hospital in January voted to continue pursuit of a merger with 158-bed Freeman Hospital and rejected alternative offers as inadequate. The hospitals extended the legally required waiting period before a merger until Feb. 22 to provide regulators with additional information.
Oak Hill sought competing offers at the FTC's request (Jan. 9, p. 14). Two for-profit hospital chains and a group of osteopathic physicians practicing at Oak Hill submitted bids, which were declined, said Thomas Campbell, an antitrust lawyer in the Chicago office of Gardner, Carton & Douglas, who is representing Oak Hill and Freeman. He declined to name the bidders or their terms.
Oak Hill and Freeman are located in Joplin, a city of 42,000 in southwest Missouri. Freeman also owns 67-bed Freeman Neosho (Mo.) Hospital, 25 miles southeast.
Their combination would control three of five hospitals and 46% of the staffed beds in a two-county metropolitan statistical area. Regulators have expressed concerns that the merger would reduce competition in the area (Nov. 7, 1994, p. 33).
The hospitals are trying to persuade the FTC that their geographic market is broader. They draw about 35% of their patients from outside the two counties, Campbell said.
The state attorney general defined the southwestern Missouri market more broadly in a recent antitrust settlement with a Springfield, Mo., hospital. It limited the hospital's physician-practice acquisitions within a 28-county area for some specialties and within a seven-county area for others (Jan. 2, p. 3)
"My hope is that when (regulators) look at the information, they'll agree that this is a merger that doesn't merit a challenge," Campbell said.
The hospitals also asked the FTC to withdraw its pre-merger notification documents, arguing that the merger is too small to merit its scrutiny. As of late last week, the agency had not responded to the request.