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Despite heavy opposition at the state and federal level, the Indiana Department of Health is giving the green light for the merger of Terre Haute-based Union Health and Terre Haute Regional Hospital with its approval of a Certificate of Public Advantage, or COPA, application.
Indiana Gov. Mike Braun’s Office announced the approval Sunday, paving the way for the merger that has been more than two years in the making.
In a written statement, Braun said, “The result of this merger will be lower prices and more health care services available to residents of Terre Haute and Vigo County because of the strict operating terms and conditions that Union accepted.”
Plans for the merger date back to September 2023, when Union Health applied for a COPA, which allows hospital mergers that the Federal Trade Commission otherwise considers illegal because they reduce competition and often create monopolies.
The FTC opposed the plan, and Union Health withdrew its application in November 2024. However, the health system filed a new COPA application in February of this year, which again drew opposition from the FTC. The agency warned that the merger poses substantial anticompetitive risks such as higher health care costs for patients and lower wages for hospital workers.
The COPA application also drew criticism from Indiana Attorney General Todd Rokita, who said in April that the merger would create a regional monopoly that “would impose a negative impact on Hoosiers in the area seeking quality health care and affordable costs.”
An analysis released earlier this year by Zack Cooper, an associate professor of public health and associate professor of economics at Yale University, found that if the merger is approved, commercial health care prices would increase by 10%-30%, while local insurance premiums would rise 3%-10%.
The analysis also noted that the wages of nurses would decrease by 5% if the merger goes through, saying “when hospitals gain market power, they also gain the ability to negotiate lower wages with workers.”
In its determination, released Sunday, the Indiana Department of Health said in addition to the comments from the FTC and Rokita’s office, the department collected written public comment and held a town hall in Terre Haute, where 63% of the speakers indicated they were in favor of the merger.
Initially, the IDOH said it determined that the proposed merger was “presumptively anticompetitive under established standards because among other things, it would result in a monopoly for inpatient acute care services in Vigo County.”
The department conducted a further analysis of the potential benefits associated with the merger under the COPA framework. Union Health proposed a series of commitments across seven categories that it said would ensure the merger “would benefit the population’s health outcomes, health care access, and quality of care in a manner that outweighs the disadvantages of the proposed merger’s anticompetitive effects.”
The categories include quality commitments, pricing commitments, and preservation of access commitments.
“The policies embedded in the commitments are designed to go beyond simply eliminating potential harm,” the IDOH said. “Objectives such as reducing costs below current levels and improving health outcomes to address substandard public health metrics represent an intention to improve health care for the impacted population.”
The COPA approval is also contingent on several policies related to oversight. Among them, Union Health has committed to allowing Indiana’s governor to appoint two members to its board of directors. Additionally, the health system must provide quarterly and annual updates to the IDOH and hold annual public listening sessions where residents can provide feedback.
“We are pleased that Union Health’s Certificate of Public Advantage application to acquire Terre Haute Regional Hospital has been approved by the Indiana Department of Health, which will help maintain access to healthcare for residents of the Wabash Valley,” Terre Haute Regional spokesperson Ann Marie Foote said in an email to Inside INdiana Business. “We appreciate our colleagues’ patience and continued dedication to serving our patients throughout this process.” Braun’s office said additional details will be provided as Union Health and Terre Haute Regional Hospital work to implement the agreement under IDOH oversight.
The Indiana General Assembly passed a law in 2021 allowing COPAs, though Vigo County was the only Indiana county that meets the criteria for hospitals to receive a COPA.
The original bill was co-authored by Sen. Ed Charbonneau, R-Valparaiso, who later reversed course and co-authored a bill this year that prohibits submitting applications for a certificate of public advantage after May 13, 2025.
That bill, Senate Enrolled Act 119, was signed into law by Braun in April.
IIB has also reached out to Sen. Charbonneau for comment but did not immediately receive a response.
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