FTC Ends Administrative Challenge of Hospital Merger in Joplin, Missouri

The Federal Trade Commission today ended its administrative challenge of a hospital merger in Joplin, Missouri, after concluding that further litigation in the case is not in the public interest. The Commission action is in keeping with a policy statement issued this past summer in which the FTC said it would determine on a case-by-case basis whether to pursue administrative litigation in merger cases after a federal district court judge has declined to bar the companies from merging pending the outcome of an administrative trial.

In this case, the FTC had alleged in an administrative complaint that the merger of Freeman Hospital and the Tri-State Osteopathic Hospital Association (which does business as Oak Hill Hospital) would violate federal antitrust laws by substantially reducing competition, resulting in higher prices or reduced services in the market for inpatient acute-care hospital services in Joplin and nearby areas of Missouri and Kansas. Prior to issuing that complaint, the FTC had sought a federal district court order to block the merger pending the outcome of the administrative trial process. The federal district court action was intended to maintain the independence and viability of the two hospitals so that, if the FTC ultimately won its administrative case, a remedial order (which, for example, could have required divestiture of one of the hospitals to a third party) actually would restore competition.

The FTC's district court motion was denied, however. The agency appealed to the Eighth Circuit Court of Appeals, and that court entered its own temporary injunction and ordered the district court to hold an evidentiary hearing. The district court did so, but again declined to issue the preliminary injunction sought by the FTC, and the Circuit Court affirmed that decision. Freeman and Oak Hill subsequently completed their merger, and there have been significant changes to Oak Hill hospital since that time that could make divestiture difficult or inadequate.

The Commission vote to dismiss the administrative complaint in this case was 5-0.

Copies of the Commission order dismissing the complaint, as well as other documents associated with this case, are available from the FTC's Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 202-326- 2502. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710. FTC news releases and other materials also are available on the Internet at the FTC's World Wide Web site at: http://www.ftc.gov

(FTC Docket No. D 9273)