- AdventHealth plans to seek approval from North Carolina state regulators to build a new hospital near Asheville, a well-known area in healthcare circles for its previous state-sanctioned monopoly.
- AdventHealth, which already offers services in the state, said it will submit an application June 15 to build a 67-room hospital in Buncombe County.
- The new facility will "bring more health care choice" to the area, the nonprofit health system said in a social media post last week announcing the move.
If approved, AdventHealth's facility will be the second hospital serving the Asheville region, "an area that would benefit from more hospital competition," Chris Garmon, a former Federal Trade Commission economist and professor at University of Missouri-Kansas City, told Healthcare Dive.
Mission Hospital is the only acute care hospital currently in Buncombe County, according to a state health department document listing licensed hospitals in North Carolina.
Nearly 30 years ago, the state shielded the only two hospital competitors in Asheville — Mission Hospital and St. Joseph's Hospital — from federal antitrust scrutiny by creating what's called a COPA, a certificate of public advantage, and allowed them to merge in exchange for prolonged state oversight.
The FTC has been critical of such legislative vehicles.
"States are increasingly using COPAs to allow certain hospital mergers to proceed despite clear antitrust concerns, with the assumption that state regulatory oversight will mitigate the effects resulting from the elimination of competition and allow the hospitals to achieve certain efficiencies," the FTC has said.
North Carolina eventually repealed the COPA in 2015, allowing the hospital to become an "unregulated monopoly," said Erin Fuse Brown, a law professor at Georgia State University, who wrote a 2019 paper on COPAs. Mission Health was sold to HCA for $1.5 billion a few years after the COPA was repealed.
North Carolina's experience serves as a cautionary tale, according to Brown's paper. "A provider can use a COPA to acquire a state-sanctioned monopoly and later seek to be freed of state oversight, leaving the monopoly provider and its corporate successors with the potential to raise prices and eliminate essential services to the detriment of the community, patients, and purchasers."
Garmon, who is set to release a research report later this year on Mission, said his research shows "Mission Health's commercial inpatient price increased at a faster rate than similar hospitals after its COPA regulatory oversight was removed," he told Healthcare Dive.
As AdventHealth seeks to expand to the Asheville area, it will be important to keep an eye on what type of services AdventHealth will offer and whether it will compete with Mission over those services, Garmon said.
AdventHealth plans to offer labor and delivery, including a C-section operating room, surgery, emergency care along with diagnostic imaging and lab services, according to an online post from AdventHealth that describes what will be included in the system's application before the state.
Mission Hospital also operating rooms for C-sections, ambulatory surgery, open heart surgery and endoscopy, according to the state document on licensed hospitals.