FTC Staff Submits Public Comment in Texas Opposing Certificate of Public Advantage Applications

The Federal Trade Commission staff submitted a comment to the Texas Health and Human Services Commission that opposes issuing certificates of public advantage (COPAs) to Hendrick Health System and Shannon Health System. If approved, the COPAs could allow the merger of Hendrick and Abilene Regional Medical Center, as well as the merger of Shannon and San Angelo Community Medical Center, to proceed, subject to regulatory oversight from the state of Texas.

Staff of the FTC’s Bureau of Competition, Bureau of Economics, and Office of Policy Planning expressed concern that the proposed merger of Hendrick and Abilene Regional would lead to significantly less competition for healthcare services in Midwest Texas. According to the staff comment, the proposed merger “presents substantial risk of serious competitive and consumer harm in the form of higher healthcare costs, lower quality, reduced innovation, and reduced access to care,” and that harm would likely not be outweighed by any potential benefits of the merger. Moreover, staff asserted that oversight from the state, including regulatory rate review, would be unlikely to effectively mitigate all of the potential anticompetitive harms to consumers.

In addition, staff expressed similar concerns about the issuance of a COPA to Shannon Health System. The staff comment noted that the proposed merger of Shannon and San Angelo Community Medical Center is also likely to substantially reduce competition and harm consumers. As with the proposed Hendrick merger, staff asserted that regulatory oversight by the state is unlikely to mitigate these harms.

The Commission vote to submit the staff comment to the Texas Health and Human Services Commission was 3-0-2. Commissioners Rebecca Kelly Slaughter and Christine S. Wilson did not participate.