Like a mother dividing Halloween candy between rival siblings, the Florida attorney general's office has approved the sale of two Columbia/HCA Healthcare Corp. hospitals-one each to competing not-for-profit systems.
Now each will have an acute-care monopoly in its two-hospital town.
Under the deal brokered by the state, Columbia will sell 214-bed Atlantic Medical Center Daytona in Daytona Beach, Fla., to Halifax Fish Community Health, which owns 478-bed Halifax Medical Center in Daytona Beach, for $14 million. And Columbia will sell 119-bed Atlantic Medical Center Ormond in nearby Ormond Beach, Fla., to Memorial Health Systems, which operates 205-bed Memorial Hospital Ormond Beach, for $13.9 million.
Both sales will close Nov. 11.
The deal that divvied up the two Columbia hospitals is a loss for Halifax, which signed an agreement in April to buy both hospitals, and a victory for Memorial, which worked the state's legal system to stop that agreement.
The settlement rankled Halifax's board of directors, which reluctantly approved the deal.
"Our board was extremely unhappy with the process and the added restrictions the attorney general has put upon us," said John Evans, a Halifax spokesman. "Unfortunately, with the (attorney general) office's ability to tie up the deal forever, our board felt it had no choice but to accept this deal."
Board member Sylvester Covington called it "a bitter pill to swallow" after months of investigation by and negotiations with the attorney general's antitrust division.
Halifax President and Chief Executive Officer Ronald Rees said the agreement reflects "no finding of any antitrust issues and doesn't deal with antitrust matters."
The original sale would have given Halifax control of three of the four hospitals in the Daytona Beach-Ormond Beach market.
But Memorial pressed the antitrust implications of the Halifax deal to state and federal officials (May 3, p. 18). Although the Federal Trade Commission never intervened and the state never filed a formal antitrust suit, the attorney general launched an investigation and threatened to challenge the two-hospital sale.
Memorial Health Systems President and CEO Richard Lind continued to maintain that Halifax's proposed purchase of the two Columbia hospitals would have presented "significant anti-competitive issues to us and placed us at a great economic disadvantage."