FTC gives Ky. deal go-ahead

Modern Healthcare - - The Week In Healthcare - Ashok Sel­vam

The Fed­eral Trade Com­mis­sion ap­pears sat­is­fied with the im­pact that a pro­posed $620 mil­lion merger with the Univer­sity of Louisville Hos­pi­tal and two sub­sidiaries of Catholic Health Ini­tia­tives would have on com­pe­ti­tion within Ken­tucky’s health­care mar­ket.

“Given this de­vel­op­ment, the time­line for clos­ing the trans­ac­tion could be sooner than we had ini­tially planned,” CHI said in a state­ment.

The FTC de­clined to ask for ad­di­tional in­for­ma­tion about how the deal could af­fect the com­pet­i­tive land­scape of health­care in the area after the par­ties ap­plied for the re­view re­quired un­der the pre­merger no­ti­fi­ca­tion process. The com­mis­sion’s 30-day win­dow to fur­ther in­ves­ti­gate the deal ex­pired Aug. 25, ac­cord­ing to a spokesman for St. Joseph Health Sys­tem in Lex­ing­ton, Ky., one of two CHI-af­fil­i­ated or­ga­ni­za­tions in­volved.

The lack of action means the FTC will not at­tempt to block the pro­posal, which would com­bine the 329-bed Univer­sity of Louisville Hos­pi­tal with CHI’s 462-bed Jewish Hos­pi­tal & St. Mary’s Health­care in Louisville, Ky., and St. Joseph (June 20, p. 6).

The deal still needs ap­proval at the state level, as well as from the Ro­man Catholic Church. The agree­ment en­vi­sions a yet-to-be named, tax­ex­empt health sys­tem that would ad­here to the tenets of the church, in­clud­ing re­stric­tions on re­pro­duc­tion ser­vices and end-of-life plan­ning.

Univer­sity of Louisville of­fi­cials an­nounced last week an agree­ment for its fac­ulty gyne­col­o­gists and ob­ste­tri­cians to pro­vide re­pro­duc­tive ser­vices at Bap­tist Hos­pi­tal East in Louisville. The univer­sity said the agree­ment would en­sure the com­mu­nity re­tains ac­cess to those ser­vices after the merger.

Ken­tucky At­tor­ney Gen­eral Jack Con­way con­tin­ues his scru­tiny of the deal, which his of­fice called prece­dent-set­ting with na­tion­wide im­pact. Con­way has said he is con­cerned that the Univer­sity of Louisville Hos­pi­tal re­ceives tax­payer sup­port and lies on sta­te­owned land. There’s no time­frame from when his of­fice would com­plete its “lengthy” re­view, said spokes­woman Al­li­son Gard­ner Martin.

Denver-based CHI plans on in­vest­ing $320 mil­lion in work­ing cap­i­tal into the deal, as well as $200 mil­lion for build­ing im­prove­ments and an ad­di­tional $100 mil­lion for statewide ser­vices.

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