Union Health and Terre Haute Regional Hospital are in discussions that could change the landscape of health care in the Wabash Valley.

A new state law was enacted to allow the hospitals to seek a merger, state legislators said.

The Tribune-Star contacted Union Health and HCA Healthcare, which owns Terre Haute Regional Hospital, for comment Thursday, but did not get an immediate response.

However, both Union and Regional sent letters to employees stating they are "in preliminary conversations."

In a Dec. 1 letter to employees, Steven Holman, president and CEO of Union Health Group, stated the hospital is "engaged in preliminary conversations with Terre Haute Regional Hospital about a unique and historic opportunity that fully aligns with our vision to lead the Wabash Valley to its best health and wellness."

The letter also states that "employees should feel confident with respect to job security."

The letter continues with "the future of health care in the Wabash Valley is bright with Union Health System as we look to collaborate with our many talented and respected peers."

Regional spokeswoman Anne Marie Foote later released a statement confirming the hospital is "having discussions with Union Health to determine if there is a way we can work together to enhance health care for our community. These are preliminary discussions," Foote said.

The process first began in the Indiana legislature.

Senate Enrolled Act 416, passed by the 2021 Indiana General Assembly, established a "certificate of public advantage" pertaining to the merger of trauma hospitals within rural counties. It was geared toward the two hospitals in Vigo County, said state Rep. Alan Morrison (Brazil).

"It is a pretty long and involved process," Morrison said. "It gives the hospital the ability to apply. We didn't further the ball any more for them other than give them the start of an application process, which goes into other parts of law, including federal regulation," Morrison said.

The state law allows mergers of certain hospitals to receive immunity from claims of state antitrust laws for the duration of the certificate.

The state law requires the Indiana Department of Health to establish requirements for the certificate and "provides that a hospital that has been issued a certificate may not be purchased by another hospital or system of hospitals unless the purchase has been approved by the Federal Trade Commission."

In a May meeting of the Indiana Department of Health's executive board, the board discussed SEA 416 "that requires the IDOH to establish the certificate of public advantage pertaining to the merger of trauma hospitals within rural counties in Indiana. Basically, geared toward two hospitals in Vigo County," the board's meeting minutes state.

The legislation was sponsored by Republican Sens. Jon Ford (Terre Haute) and Ed Charbonneau (Valparaiso) and Reps. Robert Heaton (Terre Haute), Morrison and Beau Baird (Greencastle).

Ford said the purpose of the new state law "is so if we have a county with two hospitals and they want to merge, this would let the state have a say on if the merger can go through," Ford said.

"The [Federal Trade Commission] on hospital mergers normally makes all the decisions. What we are saying is we want the state to also have some input on mergers. As we are losing rural health care throughout the state of Indiana, one of the things that we found is that when you have, say [for example if] Union and Regional hospitals want to merge, on the surface the FTC would not allow the merger because of market share," Ford said.

"That is because Union [Health] already has over 60% market share. So anything over 50% they would not allow to merge, but what has happened in some rural Indiana counties is we have lost hospitals and have lost beds and doctors and staff. This is to let the state review and see if allowing two entities to merge has a significant benefit for the local community and the state," Ford said.

The two hospitals, Ford said, are important for Indiana State University, Ivy Tech Community College and even St. Mary-of-the-Woods College "because there are clinical beds there for nurses," adding each of those higher education entities offer nursing programs.

"It is important that we, as a community, look at our hospitals and health care," Ford said.

"The first step is to get a merger agreement and then they would apply for a COPA [Certificate of Public Advantage] and the bar on the COPA is pretty high," Ford said.

Morrison added the state law was "focused solely on Vigo County, so it was not for the whole state," Morrison said, adding it was for Union and Regional hospitals.

The Tribune-Star contacted the Indiana Department of Health about the certificate. The department stated it would seek to provide more information to the newspaper on Friday.
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