VIGO COUNTY, Ind. (WTWO/WAWV) — The redacted application for the proposed Union Hospital acquisition of Regional Hospital has been released for public viewing by the Indiana Department of Health.
The COPA application was submitted on September 14, 2023, according to the document.
There is currently a public comment period open, and the COPA itself is still pending review from the IDH.
Anyone who wants to either voice their concerns about the proposed merger or share their support is asked to complete the simple public comment form at this link.
The full redacted COPA application can be read, printed or downloaded below:
What are some takeaways from the application?
According to the application, discussions for the possible merger began in November 2020 as talks of how to improve health statistics in Vigo County and surrounding counties. Many stakeholders were involved, including patients.
The term being used throughout the application for this final setup is “combined clinical platform”. Here is the note made at the start of the application about the benefits of this process:
“Upon the Closing, THRH, and Regional Hospital Healthcare Partners, LLC, will cease providing health care services. Importantly, at the same time, UHI, in satisfaction of the goals stated in I.C. § 16-21-15-4(c), will commence its operation of the Combined Clinical Platform so as to benefit the health outcomes, health care access, and quality of care in Vigo County, and the other counties of the Wabash Valley Community, in a manner that outweighs any disadvantages attributable to a reduction in competition that may result from the Merger.”
The “asset purchase agreement” was entered into by the two hospital groups on September 12, 2023.
When listing some of the services provided by both Union and Regional in 2023, here were some of the notable differences:
- Union Hospital offers two different convenient/urgent care locations, while Regional does not offer any.
- Union offers a family medicine residency, while Regional does not.
- Union offers in-patient dialysis, while Regional does not.
- Union offers an outpatient pharmacy, while Regional does not.
Additionally, a chart featured on Page 13 of the application shares the various types and numbers of healthcare providers Union Hospital provides that Regional Hospital does not, including family physicians, an OB/GYN and a cardiovascular surgery physician.
The application shares the following statements regarding the post-merger operations of Union Health Inc.:
“UHI has no plans to reduce the services currently provided by the Regional Healthcare Providers or the Union Healthcare Providers. Moreover, UHI has no plans to close any facility or other location of the Regional Healthcare Providers or the Union Healthcare Providers currently in operation. In sum, although UHI, of course, will be alert for efficiencies and cost savings that may be realized post-Merger, substantially reducing the operating costs of the Combined Enterprise is not a primary goal of the Merger – instead, the primary goal of the Merger is to significantly improve the health status of the residents of Vigo County and the other counties of the Wabash Valley Community. Although substantially reducing operating costs is not a primary goal of the Merger, this should not be interpreted as disregard for the health care costs paid by the residents of Vigo County and the other counties the Wabash Valley Community, or by health care payors. In fact, the opposite is true. In this regard, it is important to note that, if the COPA is granted, the ability of Post-Merger Union Hospital to increase charges for individual services will be significantly limited by the operation and effect of I.C. § 16-21-1-7(c). In addition, the Post-Merger Initiatives implemented by UHI will reduce health care costs, will improve the quality of care provided by the Combined Clinical Platform, and will significantly improve the health status of the residents of Vigo County and the other counties of the Wabash Valley Community.”
On Page 20 of the application, a rough timeline is given for the integration of the post-merger operations, saying if the COPA is approved and the acquisition is made, the process will “proceed organically” for the following 18-24 months.
The application states that “facility infrastructure improvements” will begin within one year of the finalized COPA approval. The expected total investment for Regional Hospital’s main hospital building is $10.5 million.
When it comes to the potential repurposing of the current facility spaces, the following options were mentioned, including several mentions of consolidation of services:
- Trauma. Union Hospital will remain a Level III trauma center post-Merger. Over time, and after considering the matter thoroughly and reviewing the relevant data, a decision might be made to triage all high-level trauma at Union Hospital.
- Wound Care. It is anticipated that, within one year post-Merger, wound care will be moved to Union Hospital, or, if sufficient space at Union Hospital proves to be unavailable, wound care services might be consolidated in some other appropriate space operated by Union Hospital that can accommodate the volume and potential growth.
- Women’s Services. Union Hospital anticipates repurposing the outpatient mammography center space currently located at Thomas Plaza (in Terre Haute) and continue to offer outpatient mammography services at Union Hospital and at Regional Hospital’s campus.
- Mother-Baby/NICU/Pediatric Unit. Within six months post-Merger, these services are expected to be consolidated at Union Hospital.
- Oncology Services. Both Regional Hospital and Union Hospital currently operate a cancer center on their respective campuses. Union Hospital has two linear accelerators and Regional has one. Regional Hospital’s linear accelerator is older and needs to be replaced – which will occur post-Merger. Union Hospital has an open vault that could host the replacement linear accelerator. Planning will take place to determine if it is best for the community to consolidate cancer services into one center. Regardless of the decision, more than $3 million will be spent to add oncology treatment-related technology for the residents of Vigo County and the other counties of the Wabash Valley Community.
- ICU. Union Hospital expects, during the first year following the Closing, to evaluate the efficacy of consolidating ICU services at Union Hospital, so as to eliminate the need to duplicate the service and resources needed to operate two different ICU locations.
- Morgue. The morgues at both Hospitals will remain in place, with plans to consolidate at Union Hospital once autopsy capabilities at Union Hospital are enhanced and a pathologist is hired.
- Cardiac Catheterization Labs. The cardiac catheterization labs will likely be consolidated at Union Hospital.
- Laundry/Linens. Laundry and linen services will be consolidated at Union Hospital.
- Lab. Main hub will be located at Union Hospital, ancillary services all locations.
- Endoscopy Suite. Primary site endoscopies will likely be consolidated at Regional Hospital’s campus.
- Ophthalmology. Eye surgeries will likely be consolidated at Regional Hospital’s campus.
- Dental. Dental procedures will be consolidated at Regional Hospital’s campus.
- Pain Services. Pain services will be consolidated at Regional Hospital’s campus.
- Sterile Processing Department. Sterile processing services will be consolidated at Regional Hospital’s campus.
- ICU at Regional Hospital’s Campus. The ICU at Regional Hospital’s campus (located directly above the ED) will be transformed into a Clinical Decision/Observation Unit.
- Physician Office Building on Regional Hospital’s Campus. The POB will be used for patient and employee education, in conjunction with, and as part of, partnerships with Indiana State University, Ivy Tech, and St. Mary’s of the Woods College.
Additionally, “back office” operation changes, including the discovery of “redundancies”, will not be possible until after the merger takes place.
In response to a required description of the effects of a COPA not being approved by the IDH, the applicants shared many points about the intended improvements this possible merger, including the following question:
Is there anything about the current health care landscape in the Wabash Valley Community that indicates the status quo will produce a significant increase in the health status of the residents, or produce a reduction in the growth of health care costs?
The application makes mention throughout to the fact that health care costs are a main focus of this merger, and said the following about health care costs and arrangements:
“For so long as the COPA remains in effect, UHI will fulfill the following commitments which are intended generally to minimize the adverse impact, if any, caused by the Merger on the ability of health care payors to negotiate appropriate payment and service arrangements with the Combined Enterprise, and to ensure that post-Closing pricing is fair to both consumers and payors:
• UHI will negotiate in good faith with all payors to include in the health plans offered in the geographic services area.
• UHI will not unreasonably refuse to negotiate with potential new payor entrants to the market or payors that have small market shares.
• UHI will attempt to include in payor contracts reasonable provisions for improved quality and other value-based incentives based upon priorities agreed upon with each payor.
• UHI will honor all payor contracts terms and not unilaterally terminate without cause any such contract prior to its slated expiration date.
• UHI will negotiate with payors in good faith and will attempt in good faith to contract with all payors that offer terms on a capitated bases, percentage of premium revenue as is, or other terms that require UHI to assume risk.
• UHI will abide by the limit on negotiate with payors in good faith and will attempt in good faith to contract with all payors that offer terms on a capitated bases, percentage of premium revenue as is, or other terms that require UHI to assume risk”
In regard to employment loss concerns, the application makes several references to intention to not leave Regional Hospital employees without a job post-merger, and includes the following statement on Page 66:
“UHI, in order to assure continuity of patient care post-Merger, will offer employment to the employees of Regional Hospital and the other Sellers. While attrition, retirements, etc., will occur over time, the Merger, itself, will not result in a loss of employment.”
UHI will be required to submit a quarterly report to the DOH throughout the COPA term, which will include details of the status of the post-merger integration, financial metrics and quality metrics.
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