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Questions raised about hospital merger under COPA

Jan. 16—The leader of an Indiana nonprofit health care coalition opposed to hospital mergers using COPAs — or certificates of public advantage — cautions that Union Hospital's proposed acquisition of Terre Haute Regional Hospital may not reap the benefits suggested.

Gloria Sachdev, president and CEO of the Employers Forum of Indiana, a nonprofit and employer-led health care coalition, advocated against COPA legislation when it was being deliberated in the Indiana General Assembly.

"I don't see how this will be beneficial for the community of Terre Haute based on what I've read," she said. "Having a monopoly in a community is never a good thing."

Hospital consolidation that creates a monopoly can lead to higher prices, reduced quality and decreased access, she said in a recent interview. "They get to make all the decisions going forward with no competition to hold them accountable."

She urges Vigo County residents to take advantage of public comment opportunities with the Indiana Department of Health.

On Sept. 12, 2023, Union and Regional entered into a purchase agreement, which include Regional's related businesses, physician clinic operations and outpatient services.

Through legislation passed in 2021 and 2022, the Indiana General Assembly established such a certificate pertaining to the merger of trauma hospitals within rural counties. It was geared specifically toward the hospitals in Vigo County.

'Opportunity to enhance access to services'

A COPA application jointly submitted by Union and Regional counters that they "face competition from a number of hospitals, health systems and other facilities" in the region and throughout Indiana.

In an emailed statement Tuesday, Union says that out of 92 counties, Vigo County ranks 63rd least healthy in Indiana. "The merger will give Union Health the opportunity to enhance access to services that will directly benefit our community."

According to state legislation, the certificate would require the regulation of the merged hospital system by IDOH in place of regulation by the Federal Trade Commission through anti-trust laws.

The department can issue a certificate only if it finds that there is clear evidence that the proposed merger would improve the health outcomes, healthcare access, and the quality of healthcare provided to the population currently served by the hospitals, and those benefits must outweigh any potential disadvantages that result from the proposed merger.

The COPA application remains under review by the state, and the public may comment. To submit a comment, visit https://bit.ly/4aHigH5.

A redacted version of the 537 page document can be viewed at bit.ly/48uGOl4 or along with this story at www.tribstar.com.

The FTC's position

The Federal Trade Commission also has been critical of COPAs.

It has studied COPAs around the country and wrote the following in a 2022 report:

Evidence indicates that "in the long run, hospital mergers shielded with COPAs often lead to higher prices and reduced quality from unconstrained provider market power."

Despite hospital claims that COPAs will result in lower costs and improved population health outcomes, "We are not aware of any proven benefits of COPAs. For these reasons, FTC staff urges state lawmakers to avoid using COPAs to shield otherwise anticompetitive hospital mergers."

The FTC has also stated that COPA laws "attempt to immunize hospital mergers from antitrust laws by replacing competition with state oversight."

The FTC also states:

—COPA monitoring and compliance are difficult.

—COPAs are susceptible to regulatory evasion.

—COPAs are only temporary. "They are eventually repealed, revoked or terminated. Once state oversight ends, the community is often left with a hospital monopoly that can exercise its market power without constraint."

In an email, an FTC public affairs spokeswoman said the federal agency doesn't comment on pending mergers or acquisitions.

Union cites benefits

In a recent statement, Union Hospital has said, "Given our mission-driven approach to delivering care, we feel confident the data supports confirmation by the Department of Health that any anti-competitive effects will be greatly outweighed by the benefits of the merger."

Anticipated benefits include:

—Increased coordination of care and physician specialization.

—Expanded Population Health initiatives so that more citizens can benefit from Union Health's programs, such as:

—Supporting elderly ability to age at home, including the Aging & Memory Clinic.

—Home OB (obstetric) services offered to combat OB deserts.

—Substance use and prevention programs.

—Chronic disease case management.

—Community Initiatives and Partnerships, such as building on Union Health's existing partnership with the Vigo County School Corp.to address childhood obesity and eating disorders.

—Providing health and wellness education.

—Local access to care will increase, so fewer citizens have to travel to specialists.

—Greater behavioral health resources will be available to the community, including potential expansion of inpatient psychiatric services now offered at Regional.

According to a Union Hospital statement sent on Tuesday, "The Certificate of Public Advantage (COPA) is designed to protect consumers. Union Health has entered into this COPA agreement with IDOH's oversight."

It adds, "Unfortunately, lobbyists with a national agenda, are negatively implying that one hospital per county will reduce competition and inflate costs. The reality is health care costs are regulated by the federal government. For example, more than 70% of the patients we serve receive either Medicaid or Medicare benefits.

"We view the COPA process as an innovative way to work collaboratively with the Indiana Department of Health to make sure the citizens of the Wabash Valley gain all of the benefits, without any of the drawbacks of a typical hospital merger, like higher prices," the Union Hospital statement reads.

Under the COPA statute, post-merger, Union Health will not be allowed to increase charges more than the Consumer Price Index.

"The Indiana legislature overwhelmingly passed carefully crafted legislation allowing hospitals in the Wabash Valley to align through a Certificate of Public Advantage (COPA) agreement," said Indiana Hospital Association (IHA) President Brian Tabor.

"These agreements are structured to ensure high quality, affordable care which will lead to improved health outcomes. Oversight will be provided by state and federal agencies to safeguard these essential benefits, but ultimately this was a locally-driven initiative based on what is best for patients in the region. I applaud Union Health and Terre Haute Regional Hospital for collaborating on a thoughtful plan for sustainable access to health care throughout the communities they serve."

Regarding competition, the merger would allow the opportunity to be more competitive with more than 50 outpatient providers, as well as in-patient care providers across the region, the Union Hospital statement says.

With the COPA's requirements, "The alignment of experts at Indiana Department of Health with leaders of Union Hospital will facilitate a level of cooperation and strategic partnership that has never existed in the state of Indiana. This opportunity for collaboration and innovation, when it comes to improving access and quality of care, is a win-win for local patients and practitioners," Union Hospital says.

The COPA application states that Indiana law "protects against competitive harms by providing for ongoing, active supervision by IDOH and the ability of the Office of the Attorney General to investigate whether a hospital that holds the certificate continues to meet the requirements of the certificate."

It also states the merger will allow the combined entity "to compete more effectively against large and significant health systems in the state, many of which are growing themselves."

State review

The Tribune-Star contacted the Indiana Department of Health about how much longer the public comment period would extend and when IDOH would make a decision on the COPA.

According to an email, "The public comment period will close 30 days after all application documents have been received. IDOH is verifying the application and will post on the website any additional documents submitted and the date the public comment period will end when that process is complete."

The department also emailed that IDOH will issue a decision within 120 days after all required information is received as set by statute.

The 120 days "has not begun as we are completing the verification process now," IDOH stated last week.

Sachdev, a pharmacist by training, said she is data-oriented and her decision-making is evidence-based.

"I do have concerns for the Terre Haute community. I have no interest other than I just think residents of Terre Haute should be aware this is not a done deal ... If they have any concerns they should let that be known to the Indiana Department of Health or health commissioner," she said.

Union and Terre Haute Regional can merge without a COPA, she said.

Sachdev suggests a COPA is being sought "to prevent the Federal Trade Commission from stopping their merger."

Sue Loughlin can be reached at 812-231-4235 or at sue.loughlin@tribstar.com. Follow Sue on X at @TribStarSue.

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