Indiana, Union Hospital signed an agreement to buy rival Terre Haute Regional Hospital. If approved, this would be Indiana’s first merger under COPA, short for Certificate of Public Advantage. These laws allow mergers that the Federal Trade Commission considers illegal.”>
TERRE HAUTE, Ind. — Residents of this city of 58,000 are used to having to wait at railroad crossings for one of dozens of daily freight trains to pass.
But a merger proposal between the two hospitals on either side of the city could exacerbate the problem in emergency situations if the hospitals closed some services, such as trauma care, at one site, which the proposal cites as a possibility. Tom High, fire chief of a nearby municipality, said some first responders would be forced to transport critical patients further, risking longer delays, if they become what locals call “run over” by a passing train.
That’s just one of the fears in this community as Indiana officials review whether to allow Union Hospital, licensed as a 341-bed facility, to buy the county’s only other acute care hospital, the 278-bed Terre Haute Regional Hospital. The proposed deal also raises concerns about reduced tax revenue, worsening care and higher prices.
In the coming months, the Indiana Department of Health must find “clear evidence” that the proposed merger would improve health outcomes, access and quality of care. Those benefits must “outweigh any potential disadvantages.”
As the country’s health care industry has become more concentrated amid a steady pace of mergers in recent decades, it is common for one large system to dominate a market. In this case, the deal would be Indiana’s first merger under the COPA law, short for Certificate of Public Advantage, which the state enacted in 2021. Such laws allow deals that the Federal Trade Commission considers illegal because they reduce competition and often create monopolies. . To mitigate the negative effects of a monopoly, merging hospitals often accept conditions imposed by state regulators.
Union Hospital leaders said it is time to go “beyond the competition” for the sake of the region, which has struggled to maintain jobs and increase life expectancy rates. Hospital spokesman Neil Garrison said the merger would ultimately improve care, increase access and reduce costs. Leaders at Regional Hospital, owned by the for-profit chain HCA Healthcare, did not respond to questions about the proposal.
However, an unusual implication arises: If the merger is approved, the surrounding county would lose tax revenue from one of its largest companies. Union Hospital, which as a nonprofit organization is exempt from paying taxes, would acquire Terre Haute Regional, which pays about $508,000 in county taxes by 2023, Vigo County Auditor Jim Bramble said. That’s the equivalent of the starting salaries of about nine sheriff’s deputies, according to the county’s $83 million 2024 budget.
Garrison said the hospital system is aware of the fiscal implications for the county and is “exploring opportunities” to address them.
Meanwhile, Roland Kohr, a former Regional pathologist and county coroner, worries about erasing the competition that forced hospitals to add services or catch up. “The push to introduce new technologies and recruit more doctors may not happen,” he said.
“A merged hospital system that faces little remaining competition after the merger generally has little incentive to deliver on its promises because patients have no choice,” wrote Chris Garmon, an economist at the University of Missouri-Kansas City who has studied hospital mergers. COPA, in a warning to Indiana health officials about the proposed merger.
Indiana already has one of the highest hospital prices in the country, according to a study by the research organization Rand Corp. The Indiana Legislature spent the last year trying to control prices. Gloria Sachdev, executive director of the Indianapolis-based Indiana Employers Forum, which pushed for those price caps on behalf of frustrated business leaders, worries that a union-Regional merger would undo those gains and further increase prices. prices.
Indiana’s COPA restricts how much the hospital could increase charges, Garrison said.
Separately, the nation’s largest hospital system created by COPA, Ballad Health, has reported that the time patients spend in its emergency rooms in Virginia and Tennessee before being hospitalized has more than tripled, reaching nearly 11 hours, in the six years since that monopoly. of 20 hospitals formed. Still, Tennessee has given Ballad top marks even as certain quality metrics, including ER speed, fall below established benchmarks.
Ballad Health spokeswoman Molly Luton said the system’s performance has improved since those statistics were collected.
Merging healthcareThese Appalachian hospitals made big promises to get a monopoly. They are not complying.
Last fall, some Tennesseans unsuccessfully urged a county board to ask the state to better regulate the hospital system. This spring, state lawmakers refused to hear testimony from residents who drove five hours to Nashville to testify in favor of a bill seeking to limit future COPA mergers in the state, which ultimately failed to reach a full vote.
Problems have also arisen when COPA (and its oversight) is eliminated, leaving the merged hospital system as an “unregulated monopoly.” After North Carolina repealed its COPA in 2015, a subsidiary of HCA Healthcare purchased Mission Health, a COPA-created monopoly in Asheville, for $1.5 billion in 2019. The monopoly in Asheville remained, but none of COPA’s conditions was applied to the new owner.
HCA said it quickly addressed the issues and denied Stein’s allegations in its legal response to the ongoing lawsuit, arguing that it has expanded services since its purchase. HCA also argued that the agreement says nothing about maintaining quality of care.
Back in Indiana, Union Hospital laid the groundwork for its merger more than three years ago, when its leaders provided the language for COPA legislation to then-state Sen. Jon Ford, a Republican in Terre Haute, believing he would be “the best advocate for this proposal,” according to legislative testimony from Taylor Hollenbeck, a consultant for RJL Solutions on the merger. Ford, listed on the legislature’s site as a co-author of the bill, did not respond to requests for comment.
The union’s executive director, Steve Holman, testified at the bill hearings that the county’s public health rankings (with average life expectancy ranking 68th among the state’s 92 counties) should be a “call to action.” action” to do something “big and bold.
Terre Haute Mayor Brandon Sakbun agrees the merger could help what he called the county’s “abysmal” public health statistics. Last year, he was elected the city’s youngest mayor at age 27 with a promise to “turn Terre Haute around.” The region’s workforce has steadily declined, and local leaders have pinned their hopes on a new casino and an electric vehicle battery parts maker to reverse the trend.
Sakbun’s father is an OB-GYN in Union, but the mayor said that doesn’t influence his opinion and that he supports merging hospitals despite the loss of tax base. He believes he will help recruit medical and other professionals in an area that has struggled to attract top talent.
“Do I think this is the one that goes against the investigation?” Sakbun said. “The truth is that if”.
KFF Health News is a national newsroom that produces in-depth journalism on health issues and is one of the main operating programs of KFF, an independent source of research, polling and health policy journalism.
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