UPDATE: Proposed SB Clinic/ Beacon merger called off

By: NewsCenter 16 Email
By: NewsCenter 16 Email

SOUTH BEND, Ind. -- For some, it’s a bitter pill to swallow, but a proposed merger between the South Bend Clinic and Beacon Health System has been abandoned.

The decision was mutual; both sides agreed the deal announced last June should now be called off.

“It’s clearly not the end of the world, both Beacon and the South Bend Clinic have been around for 100 years or more and we’ll be around for another 100 plus years,” said South Bend Clinic CEO Paul Meyer. “I think we had anticipation and ambitions for what we might be able to do together as a combined merged entity, but it doesn’t preclude us from working together as we have for a decade.”

After ten months of trying to win regulatory approval from the Federal Trade Commission, Beacon was told that the process would take another 12 to 18 months to complete.

“No outright denial, they’d asked for additional information, you can try to read into the request for additional information, frankly, we found that this was probably best to move forward with not doing a formal merging of the medical groups,” said Dr. Vincent Henderson, M.D., with Beacon Medical Group.

Both entities decided that there was too high a price to pay for the type of continued uncertainty that makes it hard to hire new physicians. “Well people want to know who they're working with and I think we all want that so we were in a situation where you say we're planning on this transaction we think it’s going to happen but for right now you're working with the South Bend Clinic could be Beacon,” said Meyer.

While Dr. Henderson said he was disappointed, he added “I still think that we can find other ways to work together.”

A spokesman for the Federal Trade Commission said he couldn’t say if regulators had concerns that the merger might be bad for competition because the merger review process is confidential.

Late in the day the following written statement was made by Albert Guitierrez, President and CEO of St. Joseph Regional Medical Center:

“We believe free competition is best for healthcare, patients and this region. When a health system in a community controls too many physicians, that health system is in a position to demand higher prices, driving up the cost of healthcare with little pressure to innovate or improve quality. We will continue to be watchful for any anti-competitive practices.”

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