The Federal Trade Commission has cleared the merger of University of Massachusetts Clinical System with not-for-profit Memorial Health Care, both in Worcester, Mass.
It's the latest in a series of high-market-share hospital mergers the FTC or U.S Justice Department cleared of antitrust problems without an investigation. The Worcester deal will give the merged system control of 765, or 67%, of the city's 1,134 staffed acute-care hospital beds and would leave the system with only one acute-care competitor.
The antitrust blessing puts the transaction on target for a March closing, said Mark Shelton, spokesman for the UMass healthcare system.
Still pending is a review by the state attorney general's office. Because Memorial is chartered as a public charity, the state must approve the transfer of Memorial's charitable assets, Shelton said.
Up to now, the university system has attracted most of the regulatory and legislative attention. Because UMass is owned and chartered by the state, the Legislature had to pass a law enabling the transfer of assets to a new not-for-profit corporation. UMass also has a high level of unionization, which led to lobbying clinches that had to be refereed on the Legislature floor (Dec. 8, 1997, p. 17).
The new organization, UMass Memorial Health Care, will comprise a system of $742 million in annual revenues, more than 700 beds and 7,500 employees. The merger also will add to a local healthcare construction boom with the planned construction of a $45 million research building.
UMass Memorial's sole competitor, St. Vincent Hospital, was acquired by Tenet Healthcare Corp. in 1996, and the Santa Barbara, Calif.-based hospital chain is building a $215 million replacement facility in downtown Worcester.