A Certificate of Public Advantage (COPA) is a legal framework that allows healthcare facilities to enter, under the oversight of state authorities, into mergers or cooperative agreements which might otherwise violate antitrust laws. The purpose of COPAs is to encourage collaboration between healthcare entities, particularly in rural or underserved areas, to enhance the quality of care, reduce costs, and maintain access to essential services. By providing regulatory oversight, states aim to ensure that these collaborations benefit the public without leading to monopolistic practices that harm consumers 1. However, critics argue that oversight is difficult and often ineffective, allowing healthcare systems to increase prices to the detriment of the general public.
Antitrust laws are designed to prevent the formation of monopolies and ensure that businesses, including healthcare organizations, compete fairly. Competition is generally seen as beneficial for consumers, as it can drive down prices, encourage innovation, and improve service quality. However, in rural areas and areas with limited resources, access to healthcare is an issue. Hospitals or healthcare systems in these regions may struggle to remain financially viable, which can threaten access to care for local populations.
This is where a COPA can come into play: a COPA is issued by state governments and allows hospitals or healthcare systems to merge or collaborate in ways that would typically be prohibited under federal antitrust laws. In exchange for this regulatory protection, the state takes on the responsibility of monitoring the resulting healthcare system to ensure that the public benefits from the arrangement. Oversight usually focuses on factors such as maintaining affordable pricing, improving care quality, and ensuring continued access to necessary services 1. This oversight is intended to prevent the negative consequences of reduced competition while still allowing for the benefits of collaboration 3,4.
One of the primary benefits of COPAs is that they can preserve access to healthcare services in regions where a hospital or healthcare system might otherwise close or reduce services due to financial difficulties. This is especially important in rural areas where healthcare options are limited and travel to another hospital might be impractical for patients 2.
In addition, COPAs can facilitate greater collaboration and resource sharing, which can lead to better coordination of care, improved patient outcomes, and more efficient use of healthcare resources. By allowing partnerships, COPAs may also help stabilize healthcare costs 2.
However, there are potential drawbacks and concerns associated with their use. One of the primary criticisms of COPAs is that they reduce competition in healthcare markets. In addition, ensuring that healthcare systems adhere to the terms of the COPA can be a significant challenge for state regulators 5,6. As a result, issuing a COPA may in fact lead to increased healthcare costs.
References
1. Certificates of Public Advantage (COPAs) | Federal Trade Commission. Available at: https://www.ftc.gov/news-events/features/certificates-public-advantage-copas.
2. Randall R. Bovbjerg, R. A. B. Certificates of Public Advantage: Can They Address Provider Market Power? (2015). Available at: https://www.urban.org/sites/default/files/publication/42226/2000111-Certificates-of-
Public-Advantage.pdf.
3. Health: Consumer Services & Health Care Regulation: Certificate of Public Advantage. Available at: https://www.in.gov/health/cshcr/certificate-of-public-advantage/.
4. Certificate of Public Advantage (COPA). Available at: https://www.health.ny.gov/health_care/medicaid/redesign/copa/. (Accessed: 17th October 2024)
5. Lina M Khan, N. J. P. et al. FTC Policy Perspectives on Certificates of Public Advantage Staff Policy Paper. (2022). Available at: https://www.ftc.gov/system/files/ftc_gov/pdf/COPA_Policy_Paper.pdf
6. FTC Releases Paper Opposing Certificates of Public Advantage for Health Care Transactions | Foley & Lardner LLP. Available at: https://www.foley.com/insights/publications/2022/08/ftc-public-advantage-health-care-transactions/.