Tag Archives: hospital transactions

Top 5 Considerations When Dealing with State Antitrust Enforcement Authorities

Increasingly, state antitrust enforcement authorities are taking an interest in and/or becoming involved in the review of hospital transactions. While parties often focus on the review process at the Federal Trade Commission (FTC), careful planning will take into account the fact that the State antitrust authorities may become involved as well. Among other things, it is common for FTC staff to coordinate a review of a transaction with State officials. 

A State’s antitrust division falls under the authority of the State Attorney General. The State AG’s office often has interests that are much broader than a strict antitrust analytical framework, and so advance discussions with the State AG can help facilitate an antitrust review. The following is a list of considerations to keep in mind when considering state involvement in review of a hospital transaction:

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The Road to a Successful Transaction: Paved With Your Priorities

While I may be stating the obvious, hospitals and health systems are complex creatures that frequently drive local economies, culture and population health status (among other things).  Accordingly, when considering a potential change of control transaction, it is critical that you examine what drives your organization and what [in the community] your organization drives.  In particular, the latter is frequently overlooked in these circumstances.

What Drives Your Organization (Your Mission)

So, how do you begin to identify your organization’s priorities?  I recommend starting with the low hanging fruit—the hospital’s mission.  It is critical in the early stages of a potential transaction to consider your organization’s mission, how that mission relates to your current operations and if that mission is capable of evolving.  For instance, if your hospital’s focus for the last 50 years has related to teaching and research, then partnering with an organization that will continue to enhance and invest in these pursuits may be a key priority.  Likewise, if charity care and serving the indigent population has been the hospital’s mission historically, you will want to ensure charity care is high on your list and considered when your board evaluates a potential transaction partner.  These are the points on which you will be less likely to compromise as the deal progresses.

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