Regulators in Kansas, Missouri and New Mexico are preparing for public hearings on two blockbuster acquisitions by for-profit hospital chains.
First up is the $235 million proposed purchase of for-profit Lovelace Health System, Albuquerque, by Ardent Health Services, Nashville. New Mexico's insurance superintendent will hold a public hearing tomorrow on the proposal, which would give Ardent four acute-care hospitals in Albuquerque. The deal also requires Federal Trade Commission approval.
Meanwhile, the proposed $1.1 billion purchase of 13-hospital not-for-profit Health Midwest, Kansas City, Mo., by HCA, Nashville, is drawing the scrutiny of two state attorneys general. The deal will be the subject of a Nov. 18 hearing in Kansas City, Mo., by Missouri Attorney General Jay Nixon and a Nov. 20 hearing in Leawood, Kan., by Kansas Attorney General Carla Stovall. Stovall also plans a subsequent hearing in Iola, Kan.
Lovelace, owned by insurer Cigna Corp., Philadelphia, is an integrated system that includes a 191-bed hospital, a 167,700-member health plan and a 225-physician multispecialty group practice. Earlier this year, Ardent paid $77 million to buy St. Joseph Healthcare, also based in Albuquerque, from Catholic Healthcare Initiatives, Denver. The St. Joseph system consists of three acute-care hospitals and one rehabilitation hospital.
Ardent said it filed premerger notification in September seeking FTC approval of the Lovelace acquisition. Ardent's lawyers believe that the FTC won't challenge the deal because the company has not received a second request for information or been challenged in court, Ardent spokesman Michael Drescher said. The FTC also has not issued an early-termination notice that it has completed its review.
HCA and Health Midwest have yet to complete a definitive agreement but hope to do so by Nixon's Nov. 18 hearing, HCA spokesman Jeffrey Prescott said. High-level executives, possibly including HCA Chairman and CEO Jack Bovender Jr., will attend the hearing to make the company's case, Prescott said.
A coalition of community advocates and nurses' organizations, seeking guarantees that HCA will continue serving Health Midwest's communities, including poor neighborhoods, has been pushing for close scrutiny of the deal by both attorneys general. The coalition also wants assurances that the foundation or foundations set up with the sale proceeds -- estimates range as high as $800 million -- be accountable to the community and work for physical and mental health needs, said Dianna Moore, executive director of the Missouri Association for Social Welfare.
Other groups involved with the coalition include the Kansas Association for the Medically Underserved, the Kansas City Neighborhood Action Group, the Kansas Nurse Association and the Missouri Nurses Association.
Health Midwest owns seven hospitals, manages four and operates two -- 252-bed Overland Park (Kan.) Regional Medical Center and 217-bed Independence (Mo.) Regional Health Center -- on long-term leases with Triad Hospitals, Plano, Texas. The leases are worth about $18 million annually to Triad. Triad Chairman and CEO James Shelton told stock analysts last month that he and Bovender have discussed HCA's plans to buy Health Midwest but have not reached any agreement related to the leases.