New Filing at FTC Raises More Questions about Clinic Conduct

For Immediate Release —

The Save Lakewood Hospital Committee today released a letter which former Congressman Dennis J. Kucinich personally delivered to the Federal Trade Commission (FTC) on Friday, May 13, 2016 which asks the FTC to determine if the Cleveland Clinic failed to make a required filing under the Hart-Scott-Rodino Act (H-S-R), in its machinations involving its planned termination of in-patient care at Lakewood Hospital.

Kucinich, who served Lakewood and the greater Cleveland area in the US House for 16 years submitted the filing as part of a continuing battle at the FTC which began with an extensive brief filed last October.

In the latest complaint, (see attachments) Kucinich raises three points:

  1. There is no evidence that a mandatory filing was made regarding the Clinic’s Lakewood transaction.  Across America, larger hospital systems have been taking over smaller health care systems, flying under the regulatory radar of the FTC through various maneuvers of questionable legality. Kucinich pointed out that the asset value of Lakewood Hospital is at least $120 million; a consultant valued the hospital at $70 million, and an associated investment pool at $50 million.  “Even viewing the transaction as the wind-down of a collaboration, such as a joint-venture, it still should have been reviewed under the H-S-R Act, because of the value of the assets involved in the deal,” Kucinich wrote.
  2. Kucinich raises the question as to whether the Clinic sought to avoid a filing under Hart-Scott-Rodino, in order to avoid FTC scrutiny of the Clinic’s market concentration in the greater Cleveland area, through a review known at the Herfindahl-Hirschman Index. “If H-S-R filings, though required, are simply not made, regulators lack sufficient information to prompt a Herfindahl-Hirschman Index (‘HHI’) review to determine market concentration.”
  3. Kucinich raised questions of improper bidding procedures.  “There is reason to believe, based upon documentary evidence, that the transaction which led to the closing of Lakewood Hospital was steered to Cleveland Clinic by virtue of that party’s active participation in the development of the offering process; and that during the offering process Clinic employees, or trustees had access to review offers of its competitors.”  Kucinich submitted documentary evidence of the efforts of a second bidder.

Marguerite Harkness, Chair of the Save Lakewood Hospital Committee, said, “Congressman Kucinich has raised serious questions which deserve the attention of the Federal Trade Commission.  He is speaking for many people in the community who feel that the entire Lakewood Hospital deal stinks.”

Tom Monahan, Vice-Chair of Save Lakewood Hospital Committee said, “It is inspiring that Kucinich repeatedly comes to our defense when our own local public officials keep selling us out.  He’s still involved and that’s very good for our community.”

Save Lives, Save Jobs, Save Lakewood, Save Lakewood Hospital

Related documents: Letter to FTC, supporting documents, news release.

For questions and comments, contact:

Dennis J. Kucinich

Kevin Young
Media Relations
Save Lakewood Hospital Committee