FOR IMMEDIATE RELEASE                                          AT
WEDNESDAY, APRIL 16, 1997                          (202) 616-2771
                                               TDD (202) 514-1888

           JUSTICE DEPARTMENT WILL NOT CHALLENGE MERGER
                     OF BATON ROUGE SURGEONS



     WASHINGTON, D.C. -- Two groups of surgeons currently
practicing in Baton Rouge, Louisiana, will be allowed to merge
into a single, integrated practice group in order to contract
more efficiently with managed care and other third party payers,
the Justice Department said today.

     In a Business Review Letter issued by the Department's
Antitrust Division, Acting Assistant Attorney General 
Joel I. Klein indicated it is not likely that the proposed merger
will have any significant adverse competitive effects.

     The Department analyzed the merger's impact on a group of
about 60 peripheral vascular procedures that doctors from each
group perform.  In the letter to Bob Tucker, counsel for CVT
Surgical Center (CVT) and Vascular Surgery Associates of Baton
Rouge (VSA), Klein noted that these "overlap" procedures
accounted for only about 15 percent of the work of the CVT
surgeons.

     The Department did not accept the groups' contention that
the relevant geographic market extended all the way to New
Orleans.  Instead, the Department considered the effect of the
proposed merger using a range of assumptions about the relevant
market size.

     The Department noted that even in a narrow market limited to
Baton Rouge -- a market in which the merged entity would include
about 50 percent of the vascular surgeons who advertize in the
Baton Rouge Yellow Pages -- several factors mitigated against
concerns that the merged firm might reduce competition.

     The Department noted that (1) a New Orleans-based clinic had
opened a facility in Baton Rouge and peripheral vascular surgeons
affiliated with that clinic either already practice in Baton
Rouge or would begin to do so in response to a price increase;
(2) there are other types of specialists, such as cardiologists,
that are available to perform many of the overlap procedures; 
(3) payers appear to need very few peripheral vascular surgeons
(perhaps only one) in a network; and (4) payers informed the
Department that they felt confident they could turn to reliable
market substitutes or recruit such substitutes into the market
should the merged groups attempt to raise prices anticompet-itively.   
  
     After noting these mitigating factors, the Department
concluded that the proposed merger was not likely to create
anticompetitive market power or substantially lessen competition.

     In addition, Klein indicated that CVT and VSA expect to
achieve significant efficiencies, including improved patient care
as a result of further specialization permitted by the increased
patient volume.
  
     Under the Department's business review procedure, an
organization may submit a proposed action to the Antitrust
Division and receive a statement whether the Division will
challenge the action under the antitrust laws. 

     A file containing the business review request and the
Department's response may be examined in the Legal Procedure Unit
of the Antitrust Division, Room 215 North, Liberty Place,
Department of Justice, Washington, D.C. 20530.  After a 30-day
waiting period, the documents supporting the business review will
be added to the file.

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97-155