Two Rival Hospitals Want To Join Forces. Will Patients Lose?

In Terre Haute, Ind., two rival hospitals want to merge, a move that supporters say will save patients money and help people live longer.

But similar hospital consolidations in Tennessee, Virginia and North Carolina have resulted in government reports documenting diminished care.

In more than a dozen states, certificates of public advantage (COPAs) permit deals like the one on the table in Indiana, even though the Federal Trade Commission otherwise considers them illegal because they reduce competition. As a result, the FTC has warned states to avoid COPAs and the mergers they create.

In Terre Haute, state regulators will decide whether to allow Union Hospital to purchase the surrounding county’s only other acute care facility, Terre Haute Regional Hospital. The merger would be the first deal under the state’s 2021 COPA law. Aside from the FTC’s concerns about the anti-competitive nature of these deals, there’s another, potentially bigger question: Does allowing hospitals to combine forces improve patient care?

The largest COPA-created hospital system in the country, Tennessee-based Ballad Health, 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.

The FTC has been closely examining the effects mergers have on prices, quality and even employee wages. In 2019, the FTC ordered multiple insurers and COPA-created health systems, including Ballad, to turn over information. The FTC declined to provide an update on the status of its findings.

To mitigate the negative effects of a monopoly, merged hospitals typically agree to conditions imposed by state regulators. Still, Tennessee has awarded Ballad top marks even when certain quality metrics, including its ER speed, fall below its established benchmarks.

Ballad Health spokesperson Molly Luton said the system’s performance has improved since statistics were collected for its 2023 fiscal year, which ended June 30, 2023, and that ER wait times have shortened.

COPA arrangements have also led to fallout in nearby North Carolina. When the state repealed its 2015 COPA law, it removed state oversight of Asheville’s Mission Health system, which was required as part of the merger. That meant the local monopoly remained but none of the COPA’s conditions applied when a subsidiary of HCA Healthcare bought the system for $1.5 billion in 2019.

Last year, government inspectors found “deficiencies” at Mission Health that contributed to four patient deaths and posed an “immediate jeopardy” to patients’ health and safety, according to the 384-page federal inspection report.

North Carolina Attorney General Joshua Stein sued HCA’s subsidiary, alleging that the ER was “significantly degraded” and that the company did not maintain certain critical services, including oncology care, a violation of a purchase agreement Stein’s office negotiated because the company acquired a nonprofit.

HCA said it promptly addressed the issues found in the inspections and denied Stein’s allegations in its response to the ongoing lawsuit, arguing that it has expanded services. HCA also contended the agreement is silent about maintaining the quality of care.

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