FTC opposing Union Health acquisition of Terre Haute Regional Hospital
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The Federal Trade Commission on Thursday submitted a letter to the Indiana Department of Health expressing its opposition to Union Health’s proposed acquisition of Terre Haute Regional Hospital.
The commission urged the IDOH to deny the hospitals’ certificate of public advantage, or COPA, application, which was submitted a year ago.
Terre Haute-based Union Health first announced plans to acquire Terre Haute Regional Hospital in September 2023, though financial details of the deal were not disclosed.
In its letter, the FTC said 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.
Union Health originally said if the deal was approved, the 278-bed hospital at 3901 South 7th Street “will continue operations with no intention of interruptions throughout the transition.” CEO Steve Holman said in an email obtained by our partners at WTWO-TV that there is “no intent” to lay off any employees or close the hospital.
The commission said if the deal was allowed to go through, Union Health would have a combined share of nearly 74% of all commercially insured inpatient hospital services.
“FTC staff submits this comment to express our concern that the proposed merger presents substantial risk of serious competitive and consumer harm in the form of higher healthcare costs, lower quality, reduced innovation, reduced access to care, and depressed wages for hospital employees,” the letter reads.
“Furthermore, it is doubtful that the regulatory conditions imposed by the IN DOH 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.”
In a lengthy response to the FTC’s comments, Union Health said the merger would prioritize patient outcomes and community well-being.
“Union Health has worked diligently to provide comprehensive data and documentation to IDOH, illustrating the potential positive impacts of this merger,” the hospital said. “This is not merely a business transaction; it is a strategic effort to improve healthcare delivery in our community. By combining resources and expertise, Union Health and Regional Hospital aim to expand services, enhance the quality of care, and ultimately improve health outcomes while maintaining cost efficiency for consumers.”
The FTC added that it evaluated the financial conditions of both hospitals are financially stable and could continue operations without the merger.
“FTC staff also performed a labor analysis and determined that the proposed merger would likely depress wage growth for registered nurses due to increased employer consolidation,” the commission said.
Union Health said the merger is poised to create new job opportunities and drive economic growth in the Wabash Valley, though a specific number of potential new jobs was not provided.
The hospital said that securing the COPA would put measures in place to ensure that Union Health is held accountable for investing financial resources back into efforts to improve healthcare metrics for residents.
“Our region faces a significant prevalence of chronic health conditions, including lung disease, diabetes, and hypertension, resulting in a population that is in critical need of accessible, high-quality care close to home,” Union Health said. “Securing the COPA is essential for enhancing the quality of and access to healthcare throughout our communities.”
The Indiana Department of Health is continuing to accept public comments on the proposed COPA through the end of the day Friday.
“Indiana Department of Health is the regulatory body that is reviewing the community benefits of this transaction,” a spokesperson for Terre Haute Regional Hospital said in an email to Inside INdiana Business. “We have worked extensively with the Department of Health since the initial COPA application was submitted to make sure they have the information needed to make an informed decision regarding the healthcare needs of Vigo County.”
A timeline for a decision from the IDOH was not provided.