FTC Had 'Serious Concerns' With Proposed Mercy, Capella Deal

by Mark Friedman  on Friday, Jun. 28, 2013 4:13 pm  

Mercy Health System in Hot Springs.

Statement of FTC Competition Director Richard Feinstein on Today’s Announcement by Capella Healthcare That it Will Abandon its Plan to Acquire Mercy Hot Springs

Richard Feinstein, Director of the Federal Trade Commission’s Bureau of Competition, issued the following statement today regarding the announcement by Capella Healthcare that it is abandoning its plans to acquire rival Mercy Hot Springs health system in Hot Springs, Arkansas.

"The fact that this acquisition will not proceed is a victory for local businesses and patients, as it will preserve access to low-cost, high-quality healthcare for the citizens of Hot Springs, Arkansas," Feinstein said.

"Staff of the Bureau of Competition had been investigating the proposed transaction for months. We had informed Capella Healthcare and Mercy Hot Springs that we had serious concerns about the likely anticompetitive harm that would have resulted if the transaction was completed, and that we were prepared to challenge the transaction," Feinstein said. "Staff gathered testimonial, documentary, and economic expert evidence that this transaction was anticompetitive and would likely have resulted in higher prices and diminished health care service in Hot Springs."

Capella is a for-profit healthcare system headquartered in Franklin, Tennessee that operates 12 acute care hospitals in communities across six states. Mercy Hot Springs is a not-for-profit Catholic health care system headquartered in St. Louis, Missouri that operates over 30 hospitals and 270 healthcare clinics across seven states.

 

 

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