Dive Brief:
- AdventHealth said it formally submitted an application to state health regulators in North Carolina to build a hospital in Asheville, an area well-known for its previous state-sanctioned hospital monopoly.
- The health system is seeking to build a 67-bed hospital, including labor and delivery, surgery, an intensive care unit and an emergency department.
- The health system plans to build the hospital about nine miles from Mission Hospital, the only other acute care hospital in the area.
Dive Insight:
AdventHealth said the new hospital will bring more healthcare choice to residents in the Asheville region, which economists who have studied the region say is needed.
Mission Hospital and St. Joseph's Hospital merged nearly three decades ago and the state shielded the two competitors from federal antitrust enforcement in exchange for state oversight. Immunizing mergers is known in the industry as receiving a certificate of public advantage, or COPA.
Antitrust regulators have warned states against moving to shield competitors in this way, which effectively sanctions monopolies.
North Carolina eventually repealed the COPA, paving the way for an "unregulated monopoly," Erin Fuse Brown, a law professor at Georgia State University, wrote in a 2019 paper.
Mission Health was later sold to HCA for $1.5 billion.
Chris Garmon, a former Federal Trade Commission economist and professor at University of Missouri-Kansas City, is set to release a research paper in the August issue in the Journal of Law and Economics that shows Mission's commercial inpatient price increased at a faster rate than similar hospitals after its COPA regulatory oversight was removed.
The Federal Trade Commission is examining the effects of COPAs on healthcare prices, care quality and access to services, and previously requested information from five of the nation's largest commercial insurers.
North Carolina health regulators require approval before new healthcare facilities can be built in the state. It's known as obtaining a certificate of need, and hospital operators must prove there is a need to build additional services to avoid service duplication and an increase in healthcare costs.