FTC critical of Upstate Medical’s proposed acquisition of Crouse Health

SYRACUSE, N.Y. — The staff of the Federal Trade Commission (FTC) believes Upstate Medical University’s proposed acquisition of Crouse Health “would likely lead to higher health care costs, lower quality and less access to care, and depressed wages for area hospital workers.”

FTC staff submitted a comment to the New York State Department of Health (NYSDOH) opposing a request by Upstate Medical and Crouse Health to grant a certificate of public advantage, also known as a COPA, which could shield the merger from antitrust laws, per the FTC’s Oct. 14 announcement.

“Research has shown that Certificates of Public Advantage frequently lead to higher prices and lower quality care for patients and lower wage growth for nurses, pharmacy workers, and certain other non-medical skilled workers,” Elizabeth Wilkins, director of the FTC Office of Policy Planning, said. “We do not believe granting this COPA will benefit the people of the state of New York.”

Upstate Medical University reacted to the FTC’s comments in a statement forwarded to CNYBJ.

“We’re aware that the FTC filed a comment opposing the COPA Application. We are also aware that the FTC consistently has filed similar comments opposing COPAs in other states. We are reviewing the contents carefully, but the letter appears consistent with other public statements that the FTC has made about COPAs in general. Upstate and Crouse pursued a COPA because we strongly believe our combination is important to the future of healthcare in our region, and both parties remain committed to the process.”

Upstate Medical University and Crouse Health announced the proposed merger in April and filed a COPA application in July. NYSDOH has invited public comments on the application.

FTC comment

In its news release, the FTC noted that in Onondaga County, the merged entity would have a combined share of nearly 67 percent of commercially insured inpatient hospital services. Moreover, the proposed merger between Upstate Medical and Crouse would reduce the number of hospital options available for nearly all patients in Onondaga County from three to two.

An analysis by the FTC staff indicates that Upstate Medical “currently competes closely with Crouse, which benefits patients and also results in optimal wages and benefits for hospital employees.” The FTC comment adds that the commission sees “insufficient evidence to conclude that any benefits of the merger would outweigh the potential harms, and it is doubtful that regulatory conditions imposed by the state under the COPA would offset the potential anticompetitive harm to patients.”

The FTC staff additionally “expressed concern about a lack of transparency surrounding the COPA process, noting that the application has not yet been made readily available to the public,” per the FTC release.