Proposed Indiana hospital merger meets FTC opposition for the second time

The Federal Trade Commission says it objects to Union Health’s planned acquisition of Terre Haute Regional Hospital, marking the second time the merger bid has rankled federal regulators.

The Federal Trade Commission has filed paperwork outlining its objections to Union Health's planned acquisition of Terre Haute Regional Hospital in Indiana. The FTC opposed an earlier merger plan last fall.

The FTC previously said in September that it opposed the transaction. Facing some public opposition, Union Health and Terre Haute Regional paused their merger plans last November, but then filed a revised proposal to come together in February.

But federal regulators said Monday that the new proposal contains the same problems as the initial consolidation plan. The FTC says if Union Health and Terre Haute Regional come together, it will lead to higher prices for consumers and workers will see lower wages. The FTC voted 4-0 to send comments outlining its objections to the Indiana Department of Health.

Clarke Edwards, acting director of the FTC’s Office of Policy Planning, said the a revised Certificate of Public Advantage is still insufficient.

“This repackaged COPA application presents the same problems as before. Competition consistently results in better outcomes for patients and workers than consolidation subject to COPAs,” Edwards said in a statement. “The Indiana Department of Health should deny this attempt by Vigo County’s only two hospitals to eliminate competition and avoid antitrust review.”

Federal regulators note that Union Health has been trying to acquire the hospital for four years. In its comment letter to Indiana’s health department, the FTC said the new proposal “presents little new information.”

“FTC Staff continues to doubt that the regulatory conditions imposed by the IN DOH would effectively mitigate the potential anticompetitive harms to patients in the Terre Haute area—both in the near term and in the decades to come. Instead, the proposed merger is likely to lead to higher costs and worse healthcare outcomes for Indiana consumers, as well as lower wage growth for hospital workers,” the FTC letter states.

When Union Health submitted its revised application to acquire Terre Haute Regional last month, the system said the deal would expand the level of healthcare services to residents in Wabash Valley. Union Health said the merger would lead to better care coordination, more specialty services, expanded population health initiatives, and more behavioral health options.

Steve Holman, the CEO of Union Health, wrote in a September 2024 op-ed in the Indianapolis Star that the merger with Terre Haute would be best for the region.

“The merger is not merely a business transaction; it is a strategic effort to improve healthcare delivery in our community,” Holman wrote. “By combining resources and expertise, Union Health and Regional Hospital aim to expand services, enhance the quality of care, and ultimately improve health outcomes while maintaining cost efficiency for consumers.”

Terre Haute, a 278-bed hospital, is owned by HCA Healthcare, the nation’s largest for-profit hospital system. Union Health, a nonprofit system, operates its main hospital in Terre Haute, as well as a critical access hospital in Clinton, Indiana.

Zack Cooper, an associate professor at Yale University, has spoken out against the merger. In an interview with Chief Healthcare Executive® last fall, Cooper says the Union Health-Terre Haute merger would result in a local hospital market with no competitors. In addition to higher prices, Cooper said he’s concerned that the deal would lead to lower quality healthcare services.

“What we care about here is the reduction in competition,” Cooper said. “These are two competing hospitals in a fairly close geographic area. It would form a monopoly for local care. It would be the largest employer in the area. It's going to clearly benefit the merging hospitals. It's not going to benefit the local community.”

The FTC has generally raised concerns about hospitals using a state’s certificate of public advantage to come together. Regulators contend that such certification doesn’t allow for sufficient scrutiny, and the FTC has raised objections to other mergers and acquisitions under such certificates in other states.