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FTC opposes SUNY Upstate Medical University, Crouse Health System Merger

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The Federal Trade Commission staff submitted a comment to the New York State Department of Health opposing a request by SUNY Upstate Medical University and Crouse Health System to grant a certificate of public advantage.

The certificate of public advantage (COPA) could shield the merger from antitrust laws and the FTC believes this would lead to “higher health care costs, lower quality and less access to care, and depressed wages for area hospital workers.”

SUNY Upstate Medical University and Crouse Health System announced the proposed merger in April 2022, then filed a COPA application in July. The New York State Department of Health has invited public comments on the application.

The FTC staff also expressed concern about a lack of transparency surrounding the certificate of public advantage process, noting that the application has not yet been made readily available to the public, according to the release.

According to Ryan McCall, attorney at Tully Rinckey firm, other concerns from the FTC include “less availability to choose your healthcare provider, and less availability to go to the hospital you see fit, as well as the cost of the services that are going to be associated with that.”

When first proposed back in April, Upstate Medical said the merger would accommodate 1,200 inpatients, more than 13,000 employees and more than 70 specialties. However, in its opinion submitted this month, the FTC said this would actually mean less jobs, increased costs for patients, and lower quality of care.

“As a result of this patients are not going to receive the same quality of care,” said McCall when asked to break down the FTC’s opinion. “Due to what will be the consolidation of these two hospitals meaning they’ll be less doctors, less hospital beds, which will affect the quality. There’s going to be most likely layoffs on multiple levels.”

In New Jersey—in March—a hospital merger was killed over the FTC’s decision to file an injunction blocking the sale over similar concerns.

CNY Central reached out for comment from Upstate Medical and received the following from a spokesperson: “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.”

City of Syracuse’s Chief Policy Officer Greg Loh said the following when asked for comment on the FTC’s opposition to the merger:

“The proposed merger between Upstate University Hospital and Crouse Hospital is a very significant development for health care in the city and our region. It is important for the parties to follow and abide by each of the steps in the required review process. As a community, we need to ensure Crouse and Upstate are positioned to thrive and to provide the health care services our growing community requires.”

County Executive McMahon shared that he still sees the merger as the best option for the community.

“I’ve talked to leadership at both Upstate and Crouse,” said McMahon. “This is the best path forward to preserve the jobs in the medical infrastructure in the community and certainly we don’t want to see the costs of care go up and there’s no guarantee that that will happen. I continue to support the merger.”

If Upstate Medical acquires Crouse Hospital, there would be only two hospital systems left in the county.

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