Indiana hospital merger would lead to higher health care prices and job losses

A second COPA application filed by Union Health and Terre Haute Regional Hospital doesn’t address consumer concerns, according to a Yale University analysis

March 25, 2025

The proposed merger of Union Health and Terre Haute Regional Hospital in Vigo County, Indiana, would raise commercial health care prices of the merging parties by between 10% and 30%, raise local insurance premiums by 3% to 10%, lower nurses’ wages by approximately 5%, and cause approximately 500 job losses outside the health sector, according to an analysis by Yale economist Zack Cooper.

Cooper, who is an Associate Professor of Public Health and an Associate Professor of Economics at Yale University, shared these numbers with the Indiana Department of Health in a March 21 public comment that responds to a Certificate of Public Advantage (COPA) application filed by the two hospitals on February 5, 2025.

“I’ve been studying hospital competition and hospital mergers for nearly twenty years, and I firmly believe this merger would harm members of the public in Terre Haute and Vigo County,” Cooper said. “If the two parties are granted the COPA they’re seeking, the merger would result in higher health care prices and job losses–there’s no doubt about that.”

“What’s happening in Vigo County, Indiana, right now is unfortunately happening around the country,” Cooper said. “Health care prices keep going up, and local hospital mergers are a big reason why.”

Each year, there are between 30 and 100 mergers nationwide. About 20% of those mergers would meaningfully raise prices by lessening competition.

Indiana state officials must decide by August 13, 2025 whether to approve the COPA certificate Union Health and Terre Haute Regional Hospital are seeking.

Cooper’s public comment made several points about the proposed merger in Vigo County:

The merger would create a de-facto monopoly. If Union Health acquires Terre Haute Regional Hospital, the merged hospital would have a local market share that ranges from 75% to 100%, effectively eliminating competition from the local hospital market.
Despite assurances from Union Health and Terre Haute Regional Hospital, consumers would not be protected from price increases. In their latest COPA application, the parties introduce pricing commitments they claim would shield residents from potential price increases. But as proposed, the commitments generally apply to billed charges, which are not the basis for the majority of payments made by patients or insurers. Further, the commitments only apply for a period of seven years. There have been many examples of commercial health care prices rising–sometimes by as much as nearly 40%–when similar commitments in other COPAs expired.
The local community is overwhelmingly opposed to the merger. 80% of residents of Terre Haute responded negatively to news of the first COPA application, and recent polling suggests that 80% of Terre Haute residents remain opposed to Terre Haute Regional Hospital and Union Health merging.
COPA laws like the one in Indiana do not protect consumers as intended. The academic evidence on this is overwhelming: COPAs do not protect the public from hospital mergers. This is why Indiana State Senator Ed Charbonneau, the senator who introduced the original Indiana COPA law, is pushing to repeal his legislation.
Terre Haute Regional Hospital is unlikely to shut absent a merger: According to analysis by the Federal Trade Commission, Terre Haute Regional Hospital has profit margins measured in percentage terms that are larger than 75% of hospitals in the U.S. This means that absent a merger, Terre Haute Regional Hospital is likely to remain open and would likely find another buyer–ideally one that is not its closest competitor.

The Indiana Department of Health received more than 200 comments from concerned citizens, health care professionals, health policy experts, and others in response to the most recent COPA application submitted by Union Health.

The current application is the second COPA application submitted by Union Health and Terre Haute Regional Hospital. The parties withdrew their first application in November 2024 after receiving significant pushback from the community.

Zack Cooper is also the Director of Health Policy for the Yale’s Tobin Center for Economic Policy–a group at Yale that seeks to inform public policy on the local, state, and national level with cutting-edge Yale social science research.

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CONTACT
Delaney Parrish
Director of Strategic Communications and Outreach
The Tobin Center for Economic Policy at Yale University
delaney.parrish@yale.edu