On August 15, the Federal Trade Commission (“FTC”) issued a policy paper to highlight the potential pitfalls of state lawmakers using Certificates of Public Advantage laws (“COPAs”) on mergers of healthcare providers. The policy paper provides an overview of how COPAs can be potentially detrimental for patient costs, patient care, and the wages of healthcare workers.
COPAs replace competition by putting mergers of healthcare providers under regulatory oversight by state agencies. COPAs authorize state officials to allow hospital mergers to proceed if they determine the merger’s benefits outweigh the possible disadvantages from increased consolidation and reduced competition. There are often terms and conditions for COPA recipients that are intended to mitigate any potential harm, such as price controls and rate regulations. However, the FTC’s policy paper details how these terms and conditions may fall short due to the difficult nature of implementing and monitoring COPAs.
The FTC policy paper also discusses how mergers may lead to a decrease in quality and patient access to care, and how significantly increasing a hospital concentration in a local labor market may lead to slow wage growth for hospital workers.