Union Health withdrew its application to acquire Terre Haute Regional Hospital, a proposal federal regulators have warned would create a monopoly poised to increase costs, stifle wage growth and reduce care quality.
Union Health, a two-hospital system based in Terre Haute, Indiana, filed for a Certificate of Public Advantage last year to acquire Terre Haute Regional Hospital, roughly six miles from Union Health’s main facility. Union said it needed to acquire Terre Haute to expand services, improve care quality and reduce costs.
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Union pulled its COPA application Monday, saying it needed to rework the application to ensure it best articulates the merger’s benefits to the Indiana Department of Health, which needs to sign off on the proposal. Union did not say when it plans to resubmit an applicaiton.
“It is best to withdraw the current application to allow time for Union Health and Terre Haute Regional to continue to work with IDOH, to ensure the benefits, including improved access, quality, prevention and early intervention, are outlined in the new application,” Union said in a news release.
COPAs allow state agencies to evaluate potential shifts in pricing and quality, in place of the Federal Trade Commission doing so.
The FTC opposed the proposed deal, arguing the state would not be able to mitigate all the potential anticompetitive effects that could stem from the combination. The acquisition would have given Union control of 74% of the market for commercially insured inpatient services in Vigo County, likely leading to inflated prices and lower quality care, the FTC said in a Sept. 5 comment urging the state to deny the application. Researchers and employer groups also criticized the proposed acquisition.
The FTC did not immediately provide a comment on Union's decision to withdraw its applicaiton.
Zack Cooper, a health economist and Yale University, and Gloria Sachdev, president and CEO of the Employers’ Forum of Indiana, published an op-ed in the Indianapolis Star in October urging state regulators to deny the COPA. Their analysis estimated the proposed acquisition would increase prices by 10% and decrease nurses’ pay by 7%.
Cooper expressed skepticism that submitting a new application will sway state regulators.
“The fundamental issue here is that monopolies aren’t good for the public,” he said in an interview. “That doesn’t change if you write about [the acquisition] differently.”
