The Federal Trade Commission is asking the Indiana Department of Health to deny an application that seeks to combine Union Health and Terre Haute Regional Hospital.
FTC staff submitted the comment Thursday; the last day for public comment is today, Friday, Sept. 6.
Union Health and Terre Haute Regional are proposing to merge under a proposed, state-issued certificate of public advantage, also known as a COPA.
In September 2023, Union Health announced that it had signed an agreement to acquire Terre Haute Regional Hospital. The deal will include Regional’s related businesses, physician clinic operations and outpatient services.
According to the FTC, Union Health and Terre Haute Regional filed a COPA application in September of last year, and then submitted additional information to the IDOH in response to multiple information requests.
On Aug. 6 of this year, the Indiana Department of Health began a 120-day review period that ends Dec. 4.
According to FTC’s submitted comments, the COPA “could shield the proposed merger from antitrust scrutiny, leading to a deal that would likely impose higher costs and could lead to worse healthcare outcomes for Indiana patients, as well as lower wage growth for hospital workers.”
In Vigo County, where the effects of the proposed merger would likely be felt the most by area patients and hospital workers, the merged entity would have a combined share of nearly 74% of all commercially insured inpatient hospital services, FTC stated.
COPAs are regulatory regimes adopted by state governments that are intended to displace competition among healthcare providers, the FTC states.
“The FTC has a long history of advocating against the use of COPAs … due to concerns that COPAs facilitate hospital consolidation and substantially reduce competition in healthcare markets,” according to a news release.
Union Health’s proposed acquisition of Terre Haute Regional “raises substantial risk of serious competitive harm and there is insufficient evidence to conclude that the potential harms from the merger would outweigh the claimed potential benefits,” the FTC’s comment states.
Union Health responded in a statement that says the Wabash Valley has significant health challenges “and traditional healthcare models have not sufficiently addressed these issues.”
Vigo County ranks poorly among Indiana’s 92 counties in several key health performance indicators, including 68th in life expectancy, 60th in suicide rate and 54th in adult obesity, according to data published by the Indiana Department of Health.
Despite the presence of hospital competition in the community, the rankings indicate that existing healthcare structures have not adequately benefited residents, the Union statement said.
The proposed merger between Union Health and Regional Hospital “represents a bold, innovative approach to addressing these persistent health disparities,” Union Health states.
By combining resources and expertise, Union Health and Regional Hospital aim to expand services, enhance the quality of care and improve health outcomes while maintaining cost efficiency for consumers, the Union statement said.
Additionally, this merger could create new job opportunities and drive economic growth in the Wabash Valley, recognizing that community health is closely linked to economic development, Union’s statement said.
According to the Federal Trade Commission, the Indiana state legislature passed the Indiana COPA Act to allow hospital mergers that “may benefit the public by maintaining or improving the quality, efficiency, and accessibility of health care services offered to the public.”
However, Union Health’s proposed deal with Terre Haute Regional would allow for anti-competitive consolidation in a highly concentrated market, thereby undermining the goal of improving healthcare services in the state, the FTC’s comment states.
“It is doubtful that the COPA regulatory conditions imposed by the Indiana Department of Health would effectively mitigate all of the potential anticompetitive harms to patients in the Terre Haute area — both in the near term and in the decades to come,” the FTC comment said.
Also, FTC staff evaluated the financial conditions of Union Health and Terre Haute Regional and concluded that both hospitals are financially stable and able to continue operations absent the proposed merger.
The Federal Trade Commission vote to submit the staff comment to the Indiana Department of Health was 5-0.
Union counters that the COPA puts measures in place that will hold Union Health accountable for investing more financial resources back into bettering healthcare metrics for those living in the region.
“Union Health and Regional Hospital are dedicated to extending the benefits of both existing and new programs to a broader patient population,” Union states. “Current initiatives include in-home obstetrics services, chronic disease case management and continued partnerships with the Vigo County School Corp. to address childhood obesity and eating disorders. We are committed to the well-being of our community, making affordable and quality care essential.”
Union officials say the decision to merge was not made lightly; extensive research and careful consideration went into evaluating the pros and cons. “We are committed to being a positive example of how a COPA can be utilized to better a community, a region and most importantly, people’s lives.”
Through legislation passed in 2021 and 2022, the Indiana General Assembly established a Certificate of Public Advantage process pertaining to the merger of trauma hospitals within rural counties.
The legislation provided the statutory authority for the Indiana Department of Health to issue a COPA for certain hospital mergers.
It was geared specifically toward the hospitals in Vigo County.
A certificate requires the regulation of a merged hospital system by IDOH in place of regulation by the Federal Trade Commission through anti-trust laws.
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