Shannon Monopoly Looms While Petition for Hearing Gains Steam

SAN ANGELO, TX — According to Irving attorney Paul Craig Laird, he has amassed 144 signatures asking for a hearing before State officials before final approval and issuance of Shannon Health’s Certificate of Public Advantage, or COPA. Shannon Health is seeking approval from State regulators at the Texas Attorney General’s office and the Texas Health and Human Services Commission to become the sole, monopoly hospital in San Angelo with a service area that encompasses 42 west central Texas counties. The COPA and State oversight will immunize Shannon Health from State anti-trust legal challenges after Shannon purchases the assets of its only large competitor, San Angelo Community Medical Center, a for-profit hospital owned by Kentucky-based Community Health Systems.

CHS is also selling its Abilene Regional Medical Center and its hospital in Brownwood to Abilene’s Hendrick Medical Center, a non-profit hospital based in Abilene.

Laird’s petition requires signatories to digitally sign their name, provide an address, an email address, and allows for comments. Laird said 144 signatures are significant as only 25 signatures are required to legitimately request a public hearing.

“I sent the signatures to the Federal Trade Commission as well,” Laird said. He requested that the FTC lend a hand requesting a public hearing on the proposed monopoly.

The FTC panned the proposed Hendrick and Shannon COPAs in a letter to Commissioner Phil Wilson at the Texas HHSC.

“[E]vidence suggests that hospital consolidation may reduce quality and access for healthcare services. Competition has proven to be a more reliable and effective mechanism for controlling healthcare costs while preserving quality of care, including in rural areas facing economic challenges. For these reasons, both the current and former administrations and several leading academics have raised concerns about COPAs and have cautioned states not to rely on them in the absence of evidence that COPAs produce better results than market-based competition,” the FTC stated in the executive summary of the letter. You can see the FTC letter here.

The FTC letter primarily critiques the Hendrick buyout of Abilene Regional but added Shannon Health’s acquisition of SACMC as an appendix warning of similar bad outcomes of the Shannon monopoly.

State Rep. Drew Darby who sponsored the legislation allowing the Shannon acquisition under COPA, decried FTC bureaucrats for penning the 70-page letter.

“I am concerned about the opinion letter from paper pushing bureaucrats in Washington, D.C. – people who do not live, work, or even receive medical services in our community – that applies dry and mathematical metrics to rural Texas healthcare,” Darby said in a statement.

Also in response, Shannon published a website touting the benefits of a Shannon monopoly titled “Care for San Angelo.” Shannon’s primary argument is that allowing the acquisition, and monopoly, will keep local governance about healthcare — or decision-making — in San Angelo, “and so will revenue that will be reinvested in local jobs and making care better.”

Attorney Laird has pending lawsuits against SACMC and the dispositions of those lawsuits are unknown if the buyout moves forward. Laird said his motivation is also for the overall fairness and best outcome for San Angelo. Dr. Steve Montoya, one of Laird’s clients, said the jury was about to be seated at his civil trial against SACMC when the COVID-19 restrictions shut down the courts.

Of the proposed Shannon monopoly, Montoya asked, “If the State passed a law that gave Stripes the sole right — the monopoly — to sell gas in the region, what do you think will happen to the price of gas for motorists here?”

Laird said his online petition is still available online here. “All we ask is for a public hearing before the State grants Shannon’s COPA,” he said. See the online petition here.

According to filings, the State of Texas must approve or disapprove the COPA by October 2. Shannon claims the acquisition is on schedule and will be completed probably before the end of October. The State has so far not scheduled a public hearing.