The antitrust settlement that cleared the Tenet-OrNda deal is a first for the Federal Trade Commission.
Under a proposed consent agreement with the FTC, Tenet Healthcare Corp. must sell one of the hospitals it gained through its acquisition of OrNda HealthCorp by Aug. 1 or risk losing a second facility to divestiture.
"The settlement reflects the heightened priority the FTC has given to prompt divestitures," said Mark Horoschak, a former FTC official who was OrNda's antitrust attorney.
The agency's seven-month deadline is the shortest ever given by the FTC in a hospital antitrust case, he said. They're typically a year or more.
The FTC said the acquisition would violate federal antitrust laws in the San Luis Obispo County, Calif., area. In that area, the FTC identified a six-hospital market in which Tenet would control four hospitals and more than 85% of the market's 536 staffed beds.
The settlement requires Tenet to divest 124-bed French Hospital Medical Center in San Luis Obispo. French was an OrNda hospital. Tenet also must divest OrNda's one-third interest in Monarch Health Systems, a Santa Barbara-based physician organization.
If Tenet can't sell French Hospital by Aug. 1, the FTC will appoint a special trustee to sell it and 70-bed Valley Community Hospital in Santa Maria, Calif., another OrNda hospital. Adding Valley may attract buyers who aren't interested in one hospital.
The settlement is subject to public comment for 60 days.