Federal Trade Commission (FTC) staff have submitted a comment urging the Indiana Department of Health to deny an application seeking to merge Union Hospital, Inc. (Union Health) and Terre Haute Regional Hospital, L.P. (THRH).
The proposed merger under a certificate of public advantage (COPA) could shield the deal from antitrust scrutiny, potentially leading to higher costs and worse healthcare outcomes for Indiana patients, as well as lower wage growth for hospital workers. The merged entity would control nearly 74% of all commercially insured inpatient hospital services in Vigo County, Indiana.
Union Health and THRH filed their COPA application in September 2023 and provided additional information following multiple requests from the Indiana Department of Health. Public comments are being accepted through Friday, September 6.
COPAs are regulatory regimes adopted by state governments intended to displace competition among healthcare providers. The FTC has historically opposed COPAs due to concerns that they facilitate hospital consolidation and reduce competition in healthcare markets.
The FTC's comment states that Union Health’s proposed acquisition of THRH poses a substantial risk of serious competitive harm with insufficient evidence that potential benefits outweigh these harms. The Indiana COPA Act allows hospital mergers if they benefit the public by improving healthcare services; however, the FTC argues this merger would undermine those goals by enabling anticompetitive consolidation in an already concentrated market.
Additionally, FTC staff concluded that both hospitals are financially stable without the merger and determined that increased employer consolidation would likely depress wage growth for registered nurses.
In recent years, there has been a resurgence in COPA laws. In 2017, the FTC launched a policy project to assess COPAs' impact on prices, quality, access, and innovation in healthcare services. Studies have shown significant increases in commercial inpatient prices and declines in care quality following past COPAs.
Promoting competition in the healthcare sector is a key priority for the FTC to ensure affordable access for American consumers. The Commission voted unanimously (5-0) to submit this comment to the Indiana Department of Health.
The Federal Trade Commission develops policy initiatives affecting competition, consumers, and the U.S. economy while providing consumer alerts and updates through various channels.
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