Review slowing hospital sale
Feds looking at whether deal gives St. David’s unfair edge
The sale of the Heart Hospital of Austin, expected to be completed this spring, has been slowed considerably by a federal review to en- sure that it does not lead to an unfair business advantage for St. David’s HealthCare.
St. David’s had initially hoped to seal the $83.6 million deal with Heart Hospital by March 31 and be operating the hospital by now. But a standard review by the Federal Trade Commission has lasted longer than anticipated, hospital officials said.
Officials at both hospitals said they remain committed to the acquisition and are optimistic the deal will go through.
“We’re still in, until the determination is made” by the FTC, said David Laird, Heart Hospital president and CEO. Laird and Mark Clayton, senior vice president of St. David’s, said they have been providing documents to the trade commission upon request and have no idea how long the review will take.
“The timeline is really something they control,” Clayton said, referring to the FTC. “We’re patiently assisting in the review process, and we continue to be optimistic in the outcome of that review.”
Neither Clayton nor Laird was aware of any complaints from insurance companies, consumers or other parties that could be affected by the sale. And both said the FTC review was not an official investigation.
Commission spokesman Mitch Katz said he could not “confirm or deny” whether a complaint had been received or whether the FTC was investigating the transaction.
St. David’s and the Seton Family of Hospitals are the two largest hospital systems in Central Texas and operate most Austin hospitals.
Heart Hospital, which has 58 beds at 38th Street and North Lamar Boulevard, is coowned by MedCath Corp. Based in Charlotte, N.C., MedCath has a 71 percent interest in the hospital; doctors who founded it 11 years ago own the rest.
Securities filings earlier this year said MedCath will get $26 million from the sale after various payments and accounting provisions, including repayment of $35.3 million in secured debt that the hospital owes.
In December, St. David’s acquired Austin Heart, the physicians’ group that founded the Heart Hospital. Though the doctors remain independent, the 300 employees of Austin Heart became St. David’s employees.
MedCath said in March that it was considering selling either its nine other hospitals or its company. Being bought by St. David’s would clear up any uncertainty about Heart Hospital’s future in Central Texas and be good for consumers, Laird said.
That is among the arguments the hospital is making to the FTC, Laird said.
“St. David’s is a perfect choice for us,” he added. “They have announced their desire to focus on quality, they are one of the best employers in the community, we are a strategic acquisition to them … and it is good for the community for us not to be uncertain about the future of Heart Hospital of Austin.”