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Fed objects to proposed Crouse-Upstate University hospital merger in NY

by John R. Fischer, Senior Reporter | October 24, 2022
Business Affairs
The FTC has expressed opposition to SUNY Upstate Medical University's proposed acquisition of Crouse Health System. (Photo courtesy of SUNY Upstate Medical University)
The Federal Trade Commission has come out in opposition to a COPA application filed by SUNY Upstate Medical University and Crouse Health System for the protection of their proposed acquisition.

Announced in April 2022, the deal would make Crouse Hospital part of Upstate University Hospital, creating a health system of more than 13,000 employees, 1,200 licensed inpatient hospital beds and over 70 specialties. The Crouse campus would be rebranded as Upstate Crouse Hospital.

The two filed for a Certificate of Public Advantage in July to protect the deal against antitrust laws, with the New York State Department of Health offering the public to chance to comment on it.

FTC staff commented that the deal would increase costs, lower quality and decrease access to care. While SUNY Upstate and Crouse anticipate no staff reductions, the FTC claims that their combination would decrease wages for area worker hospitals.

The Commission voted 4-0-1 to submit the staff comment to the NYSDOH.

“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 nonmedical skilled workers,” said Elizabeth Wilkins, director of the FTC Office of Policy Planning. “We do not believe granting this COPA will benefit the people of the state of New York.”

SUNY Upstate currently competes with Crouse. The acquisition would give both nearly 67% of commercially insured inpatient hospital services in Onondaga County. This, according to the FTC, would hinder competition and reduce the number of hospitals available to patients from three to two.

Additionally, the agency says there is insufficient evidence that the deal would do more good than potential harm and doubts that any regulations imposed by the state would halt anticompetitive effects.

It also criticized the lack of transparency in the COPA process, with no application yet available to the public. It submitted a public and non-public version of its comment, with claimed confidential material redacted from the public version.

In 2017, the FTC launched a policy project to determine the effect of COPAs on cost, quality, access, and innovation for healthcare services. This includes an ongoing study of those recently approved, previous research, and a workshop on practical experiences with COPAs.

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