Three Buffalo, N.Y.-based healthcare providers are scrambling to respond to a Federal Trade Commission request for additional information about their proposed merger plans.
It represents the FTC's first test of market boundaries in an area that is buzzing with consolidation talks.
Children's Hospital of Buffalo, Buffalo General Health System and Millard Fillmore Health System filed for antitrust clearance on March 31. Their proposed merger would create a regional healthcare system with total assets of $596 million (March 24, p. 4). The consolidated organization, called CGF Health System, will control an estimated 35% of the market in an eight-county region, said John E. Friedlander, the system's president and chief executive officer (See related story, p. 44).
On May 1, the FTC asked for details concerning the impact of the merger on competition in western New York and the hospitals' contractual arrangements with insurers, Friedlander said. He said officials at the three organizations are compiling documents now and hope to fulfill the federal government's request within two to three weeks. Upon determining that the request has been satisfied, the FTC has 20 days to clear the deal or challenge it.
Despite the FTC's inquiry, CGF's Dec. 31 target for completing the merger remains unchanged. "I think that we fully expected that there would be a second request," Friedlander said, citing the deal's size and significance to the community. "We had worked it into our planning timetable." CGF's strategic planning continues as executives prepare a certificate-of-need application and develop a definitive merger agreement.