Lifespan, Care New England Merger Gets OK From Federal Trade Commission
By Felice J. Freyer, The Providence Journal, R.I.
Dec. 19–Lifespan and Care New England, the two hospital groups in Rhode Island, have learned that the Federal Trade Commission found no antitrust violations in their plans to merge.
With this decision, the hospitals surmounted the first hurdle in their effort to become a seven-hospital corporation controlling two-thirds of hospital services in Rhode Island. But they still need approval from state regulators, likely a more arduous process, and they have not yet completed their state application.
The FTC reviewed the plans to see whether the merger would limit competition in this marketplace. If the commission had concerns about a possible monopoly, it would have made a second request for information. Instead, the FTC notified the hospitals last week that a committee had recommended against seeking additional information, and then the deadline for making that second request passed at midnight Monday, said Lifespan spokeswoman Jane Bruno.
Although the newly merged hospital group would clearly dominate Rhode Island, Bruno said that the merger was not anti-competitive because the health-care marketplace extends beyond the state borders. The FTC reached the same conclusion in 1998, when Lifespan and Care New England first proposed to merge — plans that were abandoned two years later.
If approved, the merger would bring together five of the hospitals affiliated with Brown University: Rhode Island Hospital, Miriam Hospital, Butler Hospital, Bradley Hospital and Women & Infants Hospital. It would also include Newport Hospital and Kent Hospital, in Warwick, which are not teaching hospitals.
Hospital officials said they want to build an academic medical center in South Providence that would compete with Boston hospitals in attracting researchers, grants and top-notch physicians. The campus of Butler Hospital, a psychiatric hospital on Providence’s East Side, would be developed or sold, and the proceeds used to build a brain sciences institute near Rhode Island Hospital and the new medical school that Brown University plans to build.
The resulting corporation, to be called Lifespan, would be the biggest company of any kind doing business chiefly in Rhode Island, with 17,600 employees and annual patient-care revenues of nearly $2 billion.
The merger plans were announced in July. But five months later, the application for approval from the state Department of Health and the attorney general has not yet been filed. Bruno said the hospitals have been working with state regulators to complete the application but could not predict when it would be finalized. She blamed the delay on the complexity of the process and the fact that this is first time that the Health Department and the attorney general are reviewing the application together.
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