Nearly a year after the Federal Trade Commission began investigating their proposed merger, the only two tertiary-care hospitals in Erie, Pa., have not turned over the documents the agency requested.
Hundreds of boxes of documents are sitting at the hospitals' law firm while their attorneys try to clear the merger with the state attorney general's office-and the FTC apparently is making no effort to get them.
The hospitals, 477-bed Saint Vincent Health Center and 366-bed Hamot Medical Center, and the attorney general are negotiating a consent decree that would permit their proposed merger and end the state's antitrust investigation.
Combined, Hamot and Saint Vincent would hold 61% of the beds in Erie County.
Saint Vincent spokeswoman Dottie Law said the hospitals want to get support from community and business leaders and the state before complying with the FTC's 10-month-old request for information. They are "hopeful" their talks with the state will lead to a blessing for their marriage, she said.
"We're shoring up local support," Law said. "In our case, we want community support and input before we go to the attorney general. We would like a consent decree before we finalize things with the FTC."
A spokesman for the state attorney general declined comment.
Under the "state action immunity" doctrine, business transactions that are approved by a state and monitored by a state are exempt from federal antitrust scrutiny.
If history is a guide, the attorney general in Pennsylvania likely will sign off on the Erie deal, which would deal a severe blow to the FTC's case.
In recent years, the state has made similar antitrust settlements with hospitals in Williamsport and Harrisburg, under which the facilities gained near monopolies in exchange for certain limits on their business activities. The federal government subsequently cleared those deals.
The FTC doesn't impose a time limit on its second requests for information, said Robert Leibenluft, assistant director of the FTC's Bureau of Competition.
The hospitals filed for FTC antitrust clearance in April 1997. One month later, the FTC opened a full-blown investigation of the merger and made a second request for information. There are no settlement talks going on between the hospitals and the FTC, Law said.
The FTC usually communicates with state enforcement agencies during its investigations, Leibenluft said.
"Having an attorney general clear a deal might affect the FTC investigation, and it might not," he said. "Sometimes hospitals do use that strategy."
Leibenluft said the hospitals did owe his agency some documents, but he declined to elaborate on why it's taken nearly a year to file them or why the agency isn't pressing the hospitals to turn them over.