Union Health is making a new bid to Indiana regulators to buy its rival hospital in Terre Haute as the door looks poised to close on such deals.
The nonprofit health system is trying to leverage an existing state law to acquire Terre Haute Regional Hospital, the only other acute care hospital in Vigo County. After withdrawing its initial application in November amid pushback, Union has shifted its pitch to emphasize what it describes as Regional鈥檚 鈥渄eclining position鈥 while offering more concrete promises, such as limits on price increases.
Union submitted its on Feb. 5 as Indiana lawmakers were attempting to nix such mergers in their state. Lawmakers then watered down a bill that threatened to forbid Union鈥檚 deal altogether, with the amended legislation now barring mergers sought after Feb. 15, leaving an opening for Union. That means the proposed merger will next face a showdown with the administration of Indiana鈥檚 new governor, which has signaled opposition to such deals.
Indiana is among the latest states reconsidering Certificate of Public Advantage laws that greenlight hospital monopolies. This year, Tennessee lawmakers to restructure state oversight of these mergers after to repeal its COPA law. In 2023, Maine repealed its COPA law, joining Minnesota, Montana, North Carolina, and North Dakota.
鈥淚 would hope that they are reconsidering the laws because of the research on the long-run harms of COPAs,鈥 said , a University of Missouri-Kansas City economist who has studied COPA mergers.
Indiana is one of 19 states that still have COPA laws, which allow mergers that the Federal Trade Commission otherwise considers illegal because they reduce competition and often create monopolies.
In exchange for approval of these deals, the merging hospitals typically agree to meet conditions imposed by their state to mitigate the harms of a monopoly. But health care economists and the FTC have said that state oversight cannot replace competition and that these mergers ultimately harm patients.
Union Health鈥檚 first application faced pushback. The state鈥檚 Department of Health received hundreds of comments, with most opposing the deal, according to a review of documents 麻豆女优 Health News obtained through a state public records request. Doctors, health economists, and the FTC were among those who called on state regulators to deny Union鈥檚 proposal.
Union pulled its application in November, just days before the state was due to rule on the deal.
When Union filed its new application in early February, this time it promised a slew of concrete commitments and pledges to improve residents鈥 health in the largely rural communities that surround Terre Haute. Among them were promises to keep both hospitals鈥 emergency rooms open and inpatient services in operation, and to tie increases in hospital charges to the consumer price index for medical care, essentially establishing a cap so charges don鈥檛 exceed medical inflation.
It also recast its pitch to describe Regional as a hospital in decline, which Union said puts the region at risk of losing access to services if the merger is not approved. Tennessee-based HCA Healthcare owns Terre Haute Regional.
In that scenario, Union warned, if Regional were to close, the health system would essentially have a monopoly anyway, 鈥渨ithout any oversight, terms, or conditions鈥 of a COPA. Instead, it argued, a green light from state regulators could avert a hospital closure and guarantee state oversight of the combined hospital system.
Union鈥檚 first application did not argue that the merger was necessary for Regional to remain viable. In public comments submitted in and , the FTC argued to state regulators that both hospitals are 鈥渇inancially stable,鈥 adding that Regional is 鈥減art of the largest hospital system in the country with tremendous financial resources.鈥 It also cited hospital financial reporting that showed Terre Haute Regional Hospital鈥檚 profits were better than those of most other hospitals in the country.
鈥淭his repackaged COPA application presents the same problems as before,鈥 Clarke Edwards, acting director of the FTC鈥檚 Office of Policy Planning, said in a after the commission unanimously opposed the merger.
HCA did not respond to questions about Union鈥檚 characterization that Regional is a hospital in decline.
Despite Union鈥檚 assurances that the merger would benefit the region, an analysis of the first proposal found the opposite. , a health economist and an associate professor at Yale University, estimated that the price of care would rise by at least 10%, 500 jobs would be lost, and nurses鈥 pay would decline by at least 7%.
Despite the new application and new promises, 鈥渢he nature of the deal hasn鈥檛 changed,鈥 Cooper said. He said that his findings remain unchanged and that Union stands to benefit 鈥 not the community.
鈥淟ife is easier for a firm if you face less competition,鈥 he said. 鈥淭here鈥檚 less pressure to compete on quality. There鈥檚 less pressure to compete on price.鈥
In January, , a Republican and a key architect of Indiana鈥檚 , introduced the legislation to repeal the law, which would have foreclosed Union鈥檚 chance at a possible second attempt at the merger.
In February, seated side by side at a state Senate health committee hearing, Union Health CEO Steve Holman, Terre Haute Chamber of Commerce President Kristin Craig, and , a Republican representing the region, testified against the bill.
Holman told lawmakers the merger would improve the health of the region. He also noted that the hospital system had already spent $3 million on legal fees pursuing the deal. He said it seemed like lawmakers were attempting to cripple Union鈥檚 chances. 鈥淲hy has this come up now?鈥 Holman asked.
The bill to repeal the COPA law advanced out of committee by a 7-4 vote. , a Republican who represents a region a three-hour drive north of Terre Haute, said he voted against repealing the law out of deference to local officials.
鈥淚 have no dog in this fight,鈥 Bohacek said.
Charbonneau later , winning support from Union and Goode. The new version sailed through the Senate. It is now backed by two powerful Republican representatives in the House: , chair of the Public Health Committee, and , House majority whip. Heaton represents parts of Vigo County.
Union Health spokesperson Amanda Scott said in an email to 麻豆女优 Health News that Union and Regional Hospital 鈥渞ecognize the significance of a final approval鈥 and that Union views this as its last chance to acquire its rival.
But Indiana鈥檚 new governor, Republican Mike Braun, took office in January vowing to crack down on consolidation, especially in health care.
Earlier this year, Braun tapped Gloria Sachdev to lead a newly created Cabinet position overseeing the state鈥檚 health care agencies, including the state Department of Health, which will decide on the merger.
As CEO of the Employers鈥 Forum of Indiana, a coalition of businesses that has combated high hospital prices, Sachdev was an outspoken critic of the proposed merger in Terre Haute. In an October in The Indianapolis Star, she urged regulators to consider how these mergers can crush communities.
Sachdev, now the state鈥檚 secretary of health and family services, didn鈥檛 answer questions on the new bid. After 麻豆女优 Health News asked the governor鈥檚 office whether Braun has final authority over the fate of Union鈥檚 merger request, Department of Health spokesperson Greta Sanderson provided a joint statement from the agency and the office of the governor: 鈥淕ov. Braun will expect to be informed, ask questions, and ensure that whatever decision is made is thoughtful and objective with the best interests of Hoosiers in mind.鈥
The state has until June 21 to review the merger application before rendering a decision, according to the Department of Health. The public on the proposal through March 23.
