Two Terre Haute hospitals that once competed for patients will soon operate as one system under a newly approved merger that state officials said will expand care and cap prices — although critics warn the deal will eliminate competition.
The Indiana Department of Health greenlit the closely watched merger between nonprofit Union Hospital and for-profit Terre Haute Regional Hospital, owned by HCA Healthcare, creating a single hospital system in the Wabash Valley, Gov. Mike Braun’s office announced on Sunday.
IDOH’s decision will allow the Vigo County hospitals to combine operations, but under state oversight.
It marks the first hospital merger approved under Indiana’s 2021 Certificate of Public Advantage law, which allows the state to regulate consolidated hospital systems in exchange for supervision over pricing and service access.
The approval also follows months of public debate and opposition from federal antitrust officials who warned the merger could raise costs and limit patient choice.
“The result of this merger will be lower prices and more healthcare services available to residents of Terre Haute and Vigo County because of the strict operating terms and conditions that Union Hospital accepted,” Braun said in a statement. “This will bring long-term improvement to the community’s health outcomes.”
First test of Indiana’s hospital oversight law
The hospitals’ first COPA filing in September 2023 was pulled back in November 2024 after state and federal regulators raised questions about the merger’s projected benefits and oversight terms. The application was resubmitted in February with new details on price caps, service guarantees and oversight terms.
IDOH officials acknowledged in a13-page approval brief that the merger would result in a near monopoly for inpatient hospital care but called the coupling “presumptively anticompetitive” because it gives the combined system control of nearly all inpatient hospital care in Vigo County.
Department leadership said the merger was only approved after Union Hospital agreed to a set of “comprehensive final terms and conditions” intended to offset the loss of competition.
Those conditions include caps on prices, requirements to maintain both hospitals and emergency departments, and detailed oversight and reporting provisions. The state will monitor compliance annually and can impose penalties or revoke the COPA if the hospitals fail to meet their obligations.
The COPA term lasts five years for general compliance and up to ten years for pricing oversight, according to the department’s determination.
One of the key pricing requirements limits the merged system’s commercial rates to an average of no more than 265% of Medicare rates for the same services. Another “site-neutrality” rule prohibits Union Hospital from reclassifying off-campus clinics as hospital facilities without state approval — a move that would otherwise allow higher billing rates.
The department also required Union Hospital to maintain both hospital campuses, continue providing major services such as trauma care, obstetrics, chemotherapy and intensive care, and invest in facility upgrades. The hospitals must file quarterly and annual reports with IDOH, the attorney general, and the legislature detailing pricing, quality, and access metrics.
Federal and public opposition
Even so, federal antitrust regulators under both the Biden and Trump administrations opposed the merger.
In September 2024, staff from the Federal Trade Commission urged the state to reject the COPA, warning it would “likely impose higher costs and could lead to worse healthcare outcomes for Indiana patients, as well as lower wage growth for hospital workers.”
FTC staff said the combined system would control nearly 74% of commercially insured inpatient services in Vigo County.
The agency reaffirmed its opposition in March 2025, saying the revised COPA “presents the same problems as before,” including risks of higher health care costs, reduced innovation, and lower wages. The FTC also noted there was no assurance the commitments made under state supervision would remain in effect after the COPA term expires.
This repackaged COPA application presents the same problems as before. Competition consistently results in better outcomes for patients and workers than consolidation subject to COPAs. The Indiana Department of Health should deny this attempt by Vigo County’s only two hospitals to eliminate competition and avoid antitrust review.”
In April, Indiana Attorney General Todd Rokita said he was also concerned the merger would hurt competition in Terre Haute.
“We all understand that hospitals face distinct challenges, but consolidation at the expense of free-market competition is not the way to address those challenges in this case,” Rokita said earlier this year.
In a written statement, the attorney general’s office added, “IDOH must soon decide to either deny the merger or permit the consolidation and monopolization of Terre Haute’s only two hospitals.”
Public comments submitted to the state reflected similar concerns. At a public hearing held in May at Ivy Tech Community College in Terre Haute, about two-thirds of the 245 attendees supported the merger, while roughly one-quarter opposed it, according to IDOH records.
Dozens of written comments posted online by the department additionally warned that the merger would leave residents with fewer choices.
“This buy out has to be stopped. This will eliminate the health option for care in the Wabash Valley,” one commenter wrote. “Leaving the worst health care organization as the only alternative for residents. … Residents should not be left with NO CHOICE! How can we allow the monopoly of our health care?”
Others expressed concern about potential job or benefit changes for hospital employees.
Supporters, including local business leaders and community groups, said the combination would stabilize the region’s health care system and preserve services that might otherwise close if Terre Haute Regional remained independent.
Ongoing oversight
Union Hospital and Terre Haute Regional representatives said in their application that the merger was necessary to sustain access and improve health outcomes across the six-county region.
They noted that Terre Haute Regional had faced “significant operational challenges” and reductions in service lines in recent years, and that the merger would bring a unified management structure and lower overall costs.
The hospitals pledged to keep both campuses open and to adopt Union Hospital’s lower-cost pricing structure systemwide. They also committed to tens of millions of dollars in capital investments at both facilities and to expand financial assistance programs for uninsured and underinsured patients.
Under the approval, Union Hospital must submit an implementation plan within 60 days and begin quarterly reporting to IDOH. The state will also appoint two representatives to Union Hospital’s board during the COPA term to help monitor compliance.
If IDOH determines the hospitals are not meeting their obligations, it can order corrective action, impose fines, or revoke the COPA entirely.
The department’s approval summary said the merger is expected to “improve the health outcomes, healthcare access, and quality of care” in the area — but only if the hospitals meet the terms and if “the aggregate benefits outweigh any disadvantages attributable to a potential reduction in competition.”
Union Health President and CEO Steve Holman called the approval “an opportunity for growth, expanded services and improved health outcomes for those we serve.”
“This journey has been about far more than the purchase of a hospital,” Holman said in a statement. “From the beginning, we knew we wanted to protect more than 500 high-paying, high-skill healthcare jobs in the Wabash Valley. This will also come with an investment of hundreds of millions of dollars to improve healthcare outcomes for our region — including access to care.”
“This was never simply about acquiring another hospital,” he continued, “it was about ensuring that we didn’t lose one, and that our community’s access to quality healthcare would be protected for generations to come.”
Molly Callahan, chair of the Union Health Board of Directors, said the merger would allow the hospitals to “combine those resources and expand the quality of health care we provide.”