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earnings. A letter from Ernst & Young to respondent’s
representatives, dated July 14, 1992, indicates that the Surgery
Center took the General Partnership’s offer instead of the other,
higher bid because of a desire to have an affiliation with
Redlands Hospital for quality control and other reasons.
Viewed in its totality, the administrative record is clear
that SCA and petitioner derive mutual economic benefits from the
General Partnership agreement. By borrowing necessary up-front
capital from SCA, RHS (petitioner's predecessor in interest in
the General Partnership), overcame a capital barrier to gain
entry into a profitable and growing market niche. By forming a
partnership with RHS, SCA Centers was able to benefit from the
established relationship between Redlands Hospital and the
limited partner physicians to acquire its interest in the Surgery
Center at a bargain price.
By virtue of this arrangement, petitioner and SCA Centers
realized further mutual benefits by eliminating sources of
potential competition for patients, as is evidenced by the
restrictions on either party’s providing future outpatient
services outside the Surgery Center, and by Redlands Hospital’s
agreeing not to expand or promote its existing outpatient surgery
facility at the hospital. In light of the statement in the
record that it is typical for national chains such as SCA to
“shadow-price” hospitals in charging for services at outpatient
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