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FTC Notes Broader Effort to Promote Competition in Healthcare Sector

During fiscal year 2011, the FTC challenged 17 of the 1,450 transactions that were reported, and two of those were specifically hospital-related, according to the 2011 Hart-Scott-Rodino Annual Report.

The challenges pertained to mergers between ProMedica and St. Luke's Hospital in Toledo, Ohio, and Phoebe Putney Health System and Palmyra Park Hospital in Albany, Ga. Both of those matters led to litigation.

In March, the FTC upheld a December decision made by Chief Administrative Law Judge D. Michael Chappell, ordering ProMedica to divest St. Luke's Hospital to a FTC-approved buyer within 180 days. The judge ruled that the transaction harmed competition in violation of the antitrust law and would allow ProMedica to raise its prices.

The FTC challenged Phoebe Putney's proposed acquisition of rival Palmyra Park Hospital, alleging it would reduce competition and lead to higher prices. The FTC and Georgia's Attorney General also filed a separate complaint in federal district court in Albany, Ga., seeking a preliminary injunction to halt any transaction until the FTC had concluded its challenge and any subsequent appeals. In March 2012, the Department of Justice's Office of the Solicitor General filed a petition for certiori, or judicial review of the case, with the Supreme Court.

"These challenges, as well as the litigations noted above, are part of the Commission's broader effort to promote competition in the healthcare sector, which benefits U.S. consumers with products and services that are lower cost and high quality," according to the report.

The 1,450 transactions reported industry-wide in 2011 represent a 24 percent increase from 2010's 1,166 transactions.

More Articles on Hospital Transactions and the FTC:

An Overview of Recent Challenges to Hospital Transactions: Is the FTC Really More Aggressive?
The Modern Hospital Transaction: 2 Leaders Discuss Unconventional Deals
Report: Competition for Hospital Transactions Leads to Upward Pressure on Acquisition Multiples

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