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FTC review considers effect on market

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by Paul Flemming

SBJ Staff

Federal and state regulatory review of a proposed Cox acquisition of Columbia Hospitals is a complex process that will include input from Cox, Columbia, perhaps St. John's and area businesses.

The "review would entail looking at an acquisition to see if it would be anticompetitive to the consumer," said Scott Holste, a spokesman for Missouri's attorney general's office. "There's a wide variety of information that is gathered from parties involved and third parties."

In April, the Federal Trade Commission and Missouri's attorney general announced they were seeking a court order to block the proposed merger of two Poplar Bluff hospitals. The case is still pending.

The Federal Trade Commission formed a health care division within its bureau of competition in the mid-1970s to police anticompetitive behavior. About 25 lawyers work exclusively on health care cases and whether they comply with federal law.

Tom Watkins, a St. Joseph attorney specializing in health care law and chairman of the Missouri Bar Association's health and hospital law committee, said the process is "one of the most complex analyses in all of law."

After premerger notification under the Hart-Scott-Rodino Act, which Watkins said he knows Cox has made, the FTC requests information from the two immediate parties.

"The FTC has an index which allows them to compute their view of the anticompetitive effects of the merger," Watkins said. "If the merged organization exceeds their indexed number, they will challenge. It has to do with market share."

The attorney said the analysis concerns both product markets areas of care such as emergency services, cardiac treatment or other specialty markets and the geographic market.

The FTC "may come back and say we oppose the merger completely, or we oppose one particular market being merged," Watkins said.

He said the 8th District of the U.S. federal court, which would hear any case brought by the FTC, has a track record not favorable to the trade agency. In addition, Watkins said, St. John's strong position in the market would work in favor of the proposed acquisition.

Watkins said the FTC would likely seek the opinion of local business in considering the case.

Barb Pruett, co-vice chair of the Ozarks Area Business Group on Health and personnel director at Drury College, said the group is meeting June 2 to consider the proposed Cox-Columbia deal.

Jack Harootunian, chair of Ozarks Area Business Group, said that the group gathers to keep abreast of health care issues that affect business. He said after the group learns more about the deal it may then form an opinion and possibly take action.

Harootunian is also human resources director at Dayco.

"As a general viewpoint, we do like to see competition, it does make sure prices are right," he said.

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