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Indiana Weighs Hospital Monopoly as Officials Elsewhere Scrutinize Similar Deals

Indiana Weighs Hospital Monopoly as Officials Elsewhere Scrutinize Similar Deals

In Terre Haute, Indiana, Union Hospital inked a deal to buy rival Terre Haute Regional Hospital. If approved, this would be Indiana鈥檚 first merger under its COPA law, short for Certificate of Public Advantage. Such laws allow mergers that the Federal Trade Commission otherwise considers illegal. (Samantha Liss/KFF 国产精品视频 News)

TERRE HAUTE, Ind. 鈥 Locals in this city of 58,000 are used to for one of the dozens of daily cargo trains to pass through.

But a proposed merger between the two hospitals on either side of the city could in emergencies if the hospitals shut down some services, such as trauma care, at one site, which cites as a possibility. Tom High, fire chief of a nearby township, said some first responders would be forced to transport critical patients farther, risking longer delays, if they become what locals call 鈥渞ailroaded鈥 by a passing train.

That鈥檚 just one of the fears in this community as Indiana officials review whether to allow Union Hospital, licensed as a 341-bed facility, to purchase the county鈥檚 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.

Within the next few months, the Indiana Department of 国产精品视频 must find 鈥渃lear evidence鈥 that the proposed merger would improve health outcomes, access, and the quality of care. Those benefits must 鈥渙utweigh any potential disadvantages.鈥

As the nation鈥檚 health care industry has become more concentrated amid a steady clip of mergers in recent decades, it鈥檚 common for one large system to dominate a market. In this case, the deal would be Indiana鈥檚 first merger under the COPA law, short for Certificate of Public Advantage, that the state enacted in 2021. Such laws allow deals that the Federal Trade Commission otherwise considers illegal because they reduce competition and often create monopolies. To mitigate the negative effects of a monopoly, the merged hospitals typically agree to conditions imposed by state regulators.

Union Hospital leaders said it鈥檚 time to move 鈥渂eyond competition鈥 for the sake of the region, which has struggled to keep jobs and raise life expectancy rates. Hospital spokesperson Neil Garrison said the merger would ultimately improve care, increase access, and cut costs. Leaders of Regional Hospital, which is owned by for-profit chain HCA 国产精品视频care, did not respond to questions about the proposal.

One unusual implication arises, though: If the merger is approved, the surrounding county would lose tax revenue from one of its larger businesses. Union Hospital, which as a nonprofit is exempt from paying taxes, would be acquiring tax-paying Terre Haute Regional, which paid roughly $508,000 in county taxes for 2023, said Vigo County Auditor Jim Bramble. That鈥檚 the equivalent of the starting salaries of about nine sheriff鈥檚 deputies, per the county鈥檚 2024 budget.

Garrison said the hospital system is aware of the tax implications for the county and is 鈥渆xploring opportunities鈥 to address it.

a mural on an outdoor wall that shows flowers and reads Terra Haute, Indiana
Indiana regulators are weighing whether to allow rival hospitals to merge in Terre Haute. The deal would be Indiana鈥檚 first merger under the COPA law, short for Certificate of Public Advantage, that the state enacted in 2021. (Samantha Liss/KFF 国产精品视频 News)

Meanwhile, Roland Kohr, formerly a pathologist at Regional and a county coroner, frets about erasing competition that forced the hospitals to add services or match the other. 鈥淭he push to introduce new technologies, to recruit more physicians, that may not happen,鈥 he said.

The FTC has urged states to avoid COPAs, that found they 鈥渉ave resulted in significant price increases and contributed to declines in quality of care.鈥 The fallout of similar mergers has triggered federal sanctions in North Carolina and pushback from locals and legislators in Tennessee.

鈥淎 merged hospital system that faces little remaining competition after the merger usually has little incentive to follow through with its promises because patients have no other choice,鈥 wrote , a University of Missouri-Kansas City economist who has studied COPA mergers, in a warning to Indiana health officials about the proposed merger.

Indiana already has among the , according to a study by the Rand Corp. research organization. The Indiana Legislature spent the past year trying to . Gloria Sachdev, CEO of Indianapolis-based , which pushed for those pricing limits on behalf of frustrated business leaders, is worried a Union-Regional merger would undo those gains and raise prices further.

Indiana鈥檚 COPA restricts how much the hospital could increase charges, Garrison said.

Brandon Sakbun, Terre Haute鈥檚 youngest mayor sits at a desk in front of a laptop and computer screen. He is wearing a navy suit and light blue shirt.
Brandon Sakbun was elected last year as Terre Haute鈥檚 youngest mayor. He believes a merger between the surrounding county鈥檚 only two acute care hospitals would benefit residents by turning around the region鈥檚 鈥渁bysmal鈥 public health statistics. (Samantha Liss/KFF 国产精品视频 News)

Elsewhere, the largest COPA-created hospital system in the country, Ballad 国产精品视频, has reported that the time patients spend in its ERs 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 awarded Ballad top marks even when certain quality metrics, including its ER speed, fall below established benchmarks.

Ballad 国产精品视频 spokesperson Molly Luton said the system鈥檚 performance has improved since those statistics were gathered.

Last fall, some Tennesseans unsuccessfully to call on 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 for in the state 鈥 which ultimately didn鈥檛 make it to a full vote.

Problems have also occurred when a COPA 鈥 and its oversight 鈥 are removed, leaving the merged hospital system as an 鈥.鈥 After North Carolina repealed its COPA in 2015, a subsidiary of HCA 国产精品视频care bought Mission 国产精品视频, a COPA-created monopoly in Asheville, for $1.5 billion in 2019. The monopoly in Asheville remained but none of the COPA鈥檚 conditions applied to the new owner.

Last year, government inspectors found 鈥渄eficiencies鈥 at Mission 国产精品视频 that contributed to four patient deaths and posed an 鈥渋mmediate jeopardy鈥 to patients鈥 health and safety, according to the 384-page report. North Carolina Attorney General Joshua Stein last year, alleging the ER was 鈥渟ignificantly degraded,鈥 and that the company failed to maintain certain critical services, including oncology care, a violation of a purchase agreement Stein鈥檚 office negotiated with it because the company acquired a nonprofit.

HCA said it promptly addressed the issues and denied Stein鈥檚 allegations in its legal response to the ongoing lawsuit, arguing it has expanded services since its purchase. HCA also argued that the agreement is silent about maintaining the quality of care.

A sunset shot of Terra Haute's Vigo County Courthouse. It is an ornate building with a clock tower.
If Indiana regulators OK a merger between rival hospitals in Terre Haute, the surrounding county would lose tax revenue when nonprofit Union Hospital, which is tax-exempt, acquires Terre Haute Regional, a for-profit hospital owned by Nashville-based HCA 国产精品视频care. (Samantha Liss/KFF 国产精品视频 News)

Back in Indiana, Union Hospital laid the groundwork for its merger more than three years ago when its leaders provided the language for to then-state Sen. , a Republican in Terre Haute, believing he would be 鈥渢he best champion for this proposal,鈥 according to legislative testimony from Taylor Hollenbeck, an RJL Solutions consultant on the merger. Ford, listed on the legislature鈥檚 site as the bill鈥檚 co-author, did not respond to requests for comment.

Union CEO Steve Holman testified in the bill鈥檚 hearings that the county鈥檚 public health rankings 鈥 with an average in the state 鈥 should be a 鈥渃all to action鈥 to do something 鈥渂ig and bold.鈥

Terre Haute Mayor Brandon Sakbun agrees the merger could help what he called the county鈥檚 鈥渁bysmal鈥 public health statistics. Last year, he was elected the city鈥檚 youngest mayor at age 27 on a promise to 鈥渢urn Terre Haute around.鈥 The region鈥檚 workforce and local leaders have pinned their hopes on a new casino and a manufacturer of battery parts for electric vehicles to reverse this trend.

Sakbun鈥檚 father is an OB-GYN at Union, but the mayor said that doesn鈥檛 color his opinion and that he supports the hospital merger despite the loss of the tax base. He believes it will help recruit medical and other professionals to an area that has struggled to attract top talent.

鈥淒o I believe that this is the one that bucks the research?鈥 Sakbun said. 鈥淚 truthfully do.鈥

KFF 国产精品视频 News correspondent Brett Kelman contributed to this article.