US Federal Trade Commission (FTC) staff have submitted a comment to the Indiana Department of Health, recommending the rejection of a merger application between Union Health and Terre Haute Regional Hospital (THRH).
The Commission voted to submit the staff comment to the Indiana Department of Health.
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Under a certificate of public advantage (COPA), the merger could potentially lead to higher costs and poorer healthcare outcomes, as well as lower wage growth for hospital workers in Indiana, the comment explains.
In Vigo County, Indiana, the proposed merger’s impact would be significant, with the combined entity controlling approximately 74% of all inpatient hospital services that are commercially insured.
The application for the COPA was filed by the companies in September last year, with additional information provided subsequently.
Public comments are being accepted until 6 September.
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By GlobalDataCOPAs are state government regulatory regimes designed to replace competition among healthcare providers, a practice the FTC has historically opposed.
The FTC argues that COPAs often lead to hospital consolidation and reduced competition in healthcare markets.
Its comment highlights that Union Health’s proposed acquisition of THRH poses a substantial risk of competitive harm, without sufficient evidence to suggest the benefits would outweigh the potential harms.
According to the FTC, the Indiana COPA Act was introduced to permit hospital mergers that could ‘improve healthcare efficiency, quality, and accessibility’.
Despite this, it believes that the proposed Union Health and THRH merger would lead to anti-competitive consolidation, contradicting the Act’s intention.
The FTC also doubts whether the COPA regulatory conditions would effectively prevent anticompetitive effects in the Terre Haute area.
In addition, the staff’s financial analysis of Union Health and THRH indicates that both hospitals are financially stable and capable of operating independently without the merger.
A labour analysis also suggested that the merger could limit wage growth for registered nurses, mainly because of the higher employer consolidation.
The FTC has observed a resurgence in COPA laws and, since 2017, has been assessing their impact on healthcare prices, quality, access, and innovation.
Past studies have shown that COPAs can lead to higher commercial inpatient prices and declines in care quality.
