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Dive Transient:
The Federal Commerce Fee is urging Indiana to dam a hospital merger that antitrust regulators say will elevate prices and result in worse outcomes for sufferers.
On Thursday, the FTC submitted a remark with the Indiana Division of Well being asking it to oppose the mixture of Union Hospital and Terre Haute Regional Hospital on the state’s western border — two hospitals that proposed their merger beneath a controversial certificates that opponents say permits problematic mergers to go regulatory evaluate.
Union’s proposed acquisition of Terre Haute Regional — a facility owned by mammoth for-profit hospital operator HCA Healthcare — will seemingly improve hospital prices whereas negatively impacting healthcare companies in Indiana, the FTC argued in its letter. It may additionally depress wages for registered nurses within the state.
Dive Perception:
Union Hospital’s father or mother firm Union Well being introduced plans to accumulate Terre Haute Regional in September 2023. Particularly, the hospitals are proposing to merge beneath a certificates of public benefit, or COPA.
COPAs permit states to supervise hospital mergers that show they’ll profit the general public by bettering the standard or accessibility of healthcare companies — even when the offers would possibly considerably cut back competitors or create a monopoly. Such mergers usually face an uphill battle for regulatory approval by the FTC beneath federal antitrust regulation.
If authorized, the union of 341-bed Union Hospital and 278-bed Terre Haute Regional could be Indiana’s first merger beneath the state’s COPA regulation enacted in 2021.
However permitting Union and Terre Haute to merge may doubtlessly be very unhealthy for Indiana, in accordance with the FTC’s letter to state regulators.
Union and Terre have offered inadequate proof that the potential advantages from their merger would outweigh potential harms, which ought to disqualify them from receiving a COPA, the FTC argues.
“Any value financial savings or high quality advantages of the merger would must be extraordinary with the intention to outweigh the numerous aggressive hurt that’s more likely to end result from the merger, and there’s no indication that that is the case,” the FTC’s letter reads.
In the meantime, by eliminating current competitors between the 2 hospitals, the deal may elevate prices in a state that already offers with among the highest hospital costs within the nation, regulators warned. Union and Terre Haute Regional are shut rivals in the identical market — the 2 acute care services, which each present inpatient and outpatient companies, are lower than six miles from each other.
Indiana’s Vigo County would seemingly see the biggest results if the merger goes via, because the mixed entity will management almost 74% of all inpatient hospital companies for commercially insured sufferers, the FTC stated. By comparability, mergers leading to a mixed 30% market share are considered as unlawful beneath antitrust legal guidelines.
“The proposed merger far surpasses that bar,” the letter reads.
As well as, Union and Terre Haute Regional don’t want to mix to maintain their doorways open — each hospitals are financially secure and capable of proceed standalone operations, in accordance with the FTC, which reviewed the hospitals’ monetary statements between 2018 and 2023. Every hospital has been worthwhile every year throughout that interval, regulators stated.
Furthermore, Terre Haute’s father or mother firm HCA is without doubt one of the most worthwhile hospital chains within the U.S., producing over $6 billion in internet revenue final yr.
In defending their merger, the hospitals have pointed to the COPA statute, which doesn’t permit them to extend medical costs at a quicker price than the patron worth index. Nevertheless, Union and Terre Haute’s COPA software does say they could shut down some companies, similar to trauma, wound care, intensive care and pediatrics, at one facility to consolidate it within the different.
In a press release, Terre Haute Regional implied that the success of the merger is as much as Indiana, not the FTC.
“Indiana Division of Well being is the regulatory physique that’s reviewing the group advantages of this transaction. We have now labored extensively with the Division of Well being because the preliminary COPA software was submitted to ensure they’ve the knowledge wanted to make an knowledgeable determination concerning the healthcare wants of Vigo County,” stated HCA spokesperson Anne Marie Foote over e-mail.
Union Well being didn’t reply to a request for remark.
The FTC has a protracted historical past of advocating in opposition to COPAs, arguing they contribute to adversarial consolidation amongst hospitals. The legal guidelines have been rising, main the FTC to launch an investigation into their impression in 2017.
In keeping with the company’s findings (and different research), COPAs result in will increase in inpatient costs, together with declines in care high quality.
In a single instance, 20-hospital system Ballad Well being in Tennessee and Virginia noticed its wait instances for sufferers within the emergency room earlier than they have been hospitalized greater than triple because it was shaped by a COPA in 2018, in accordance with KFF Well being Information.
In one other, Mission Well being in North Carolina’s business inpatient costs elevated at the very least 20% whereas it had a COPA and at the very least 38% after its COPA was repealed, in accordance with the FTC.
The FTC has had some success with opposing COPAs up to now. Final yr, SUNY Upstate Medical College and Crouse Well being System in New York deserted their proposed merger after federal antitrust regulators opposed their COPA software.
