As healthcare gets more costly, and hospitals close in rural regions, states have moved to allow controversial, anti-competitive mergers of existing healthcare systems.
Virginia is one of 18 states that allows such mergers, and a bipartisan effort that sailed through the 2025 session could see those mergers become more frequent.
Healthcare is expensive, and rural and low-income parts of the country and the Commonwealth continue to lose hospitals and healthcare options at a rapid rate. Virginia has a law that allows competing health systems to merge with the approval of the legislature.
The only such system, known as a certificate of public advantage, or COPA, created in Virginia is Ballad Health, a network of 20 hospitals in the state’s southwestern corner.
“States have a responsibility to think beyond competition, they have a responsibility to maintain access to healthcare and to make policy decisions to make healthcare easy to get to,” Ballad CEO Alan Levine told Radio IQ.
Ballad has been in place since 2018. It was approved by both Virginia and Tennessee officials under the threat of rising costs and hospital closures.
They test the limits of federally defined anti-competitive deal making, eschewing traditional American concepts of competition leading to a decrease in prices. Instead, they argue that without full control of the market the systems won't survive.
"Instead of leaving these hospitals to die on the vine, our perspective is 'if we don't keep these hospitals open people will lose local access and that will cost lives.'" Levine said. "And it would overwhelm remaining hospitals."
"That's why we did all this," he added. "We believed in what we're doing; if you compare our system to other parts of Virginia that are similarly served by one healthcare system, you'll see we were not that different, except we were willing to automatically submit ourselves to this scrutiny."
Early reports on Ballad showed they failed to meet mandated benchmarks. More recent reports, however, show improvement.
Meanwhile, Lynchburg Delegate Wendell Walker authored a bill this year which asks the state to study easing the state regulatory process which helps determine the number of health care resources in an area.
“It’s important when we work together on legislation like this, where there is definitely a need and we can help to cut that, what I call red tape and regulations,” Walker told Radio IQ about his effort, signed by Governor Glenn Youngkin, which could lead to more certificates of public need, or COPNs.
Levine said Ballad didn't play a part in Walker's effort, but the delegate said state medical groups supported the move.
These healthcare mergers have critics, including President Donald Trump’s chair of the Federal Trade Commission, and former Virginia solicitor general, Andrew Fergueson.
In a letter sent to Indiana legislators last month Fergueson argued against the approval of a proposed healthcare merger there saying it would quote “seriously harm competition and consumers.”
Former President Joe Biden’s FTC also opposed these mergers, using the courts to block them but with little success. Still, any attempts to intervene by the feds is likely to increase cost and time.
Whether or not Trump’s FTC takes a similar path remains to be seen, but those close to the process argue Fergueson may be more likely to aid state-driven enforcement efforts as opposed to the Biden-era lobbing of legal challenges against states that welcome these unions.
Levine stressed the importance of anticompetition laws the FTC usually enforces, but he said Ballad's merger benefits people in Southwest Virginia.
"Hundreds of rural hospitals across the country are at risk of closing right now," he said. "But none in our region because of Ballad."
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.
