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Final Order: HCA to Divest 2 London Hospitals

The United Kingdom's Competition and Markets Authority has officially ordered Hospital Corporation of America to sell two of its hospitals based in London following of the release of a report based on a two-year investigation.

HCA International is the overseas division of Nashville, Tenn.-based HCA. It owns and operates six hospitals in central London as for-profit entities. The CMA, formerly known as the Competition Commission, is an independent public body in the U.K. similar to the Federal Trade Commission in the U.S. According to the group's website, it conducts investigations to ensure mergers and markets operate under fair pricing and competition.

According to the most recent report, the CMA is requiring HCA to divest London Bridge Hospital and The Princess Grace Hospital, both located in the heart of London. This follows a similar order from January, in which the group said HCA should sell those two hospitals to increase competition in the area. The CMA has argued that the lack of competition has resulted in higher charges for patients, especially for the uninsured.

"We have found that many private hospitals face weak local competition, and it is difficult for new hospitals to enter the market," said Roger Witcomb, chairman of the CMA's private healthcare inquiry group. "For self-pay patients, for whom charges are set locally, this can lead to higher prices. Additionally in central London it is clear that HCA's market power allows it to charge higher prices to insurers, who need to include its hospitals if they are going to provide cover for patients in central London."

Similar to January, HCA released a statement blasting the CMA's report. HCA International President and CEO Mike Neeb said the company will "vigorously" challenge the ruling in the courts, arguing the CMA did not factor in the hospitals' high quality scores and only focused on price.

"In failing to consider our investment, the mix of patients we treat and the complex procedures we carry, the CMA has drawn inaccurate conclusions about HCA International's pricing — something which we strongly refute and will of course be challenging," Mr. Neeb said.

More Articles on Hospital Transactions:
After FTC Victory, What is Phoebe Putney Planning for 2014?
FTC: CHS Must Sell 2 Hospitals to Complete HMA Deal
Franciscan Alliance Seeks to Divest 2 Illinois Hospitals

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