Oregon bill to give OHA control over mergers and acquisitions passes out of committee

House Bill 2362 recently passed out of the House Health Care Committee on a party line vote. The bill would require health care providers and hospitals to obtain permission from the Oregon Health Authority (OHA) before any merger, acquisition or affiliation transactions.  

 

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The bill also creates an advisory board for the OHA to help determine the usefulness and validity of the merger. No more than one-third of the board’s members may be representatives of health care providers and hospitals. This allows for the community, those who it mainly affects, to have a voice on these transactions. 

Proponents argue that mergers and acquisitions lead to higher costs and lower overall quality of care as big hospitals and health systems become bigger and more prominent. Chief sponsor of the bill, Rep. Andrea Salinas, vice chair of the House Committee On Health Care, said:

“Before these consolidations happen, we have to know how it will affect consumers. Are cost savings from these consolidations getting out to consumers? Or, is it going to be a venture capital-kind-of investment, where the savings go back out to investors?”

According to Salinas, the OHA would not block the transaction of a necessary merger that would help keep the hospital or health system afloat. However, the validation during the process can help find potential savings not aiding the payer’s well-being. 

“If there is something that is an emergency, and you have to keep the lights on, there’s consideration for that because we know that not all consolidations are bad. So if there’s a provider in a rural area that needs help, we wouldn’t want to prevent someone from coming in and helping them keep the lights on. But now is the time to put a magnifying glass on what’s happening because we are not seeing the savings from these going back out to consumers. The savings are staying within the systems and I think corporate entities are seeing these savings.”

Dr. John McConnell, professor of emergency medicine at Oregon Health and Science University (OHSU) said in a public hearing:

“The consequences for Oregonians of higher prices from consolidation would include lower wages and potentially worse health.”

Those opposed to the bill cite the many rural hospitals and primary care providers that were saved from closure from merger and acquisitions. According to capitol insiders, this bill risks the appeal of investing in health care in Oregon. Becky Hultberg, president & CEO of the Oregon Association of Hospitals and Health Systems (OAHHS), said:

“In Oregon, partnerships have maintained and enhanced access to high quality, essential care, especially in rural and medically underserved parts of the state. By law, the Attorney General’s office reviews proposed mergers to make sure they are created in the public interest. Supporters of HB 2362 have not identified an Oregon problem this policy would solve. In fact, thanks to partnerships brought by health systems, a recent study by the American Hospital Association showed health care costs actually dropped by 2.3% following a merger.”

Hospitals and health systems are more concerned about dealing with the COVID-19 pandemic than with mergers and acquisitions legislation. They believe that more time and effort needs to put onto the pandemic and the lasting effects of it. Hultberg said:

“This legislation is not needed and our focus should be on delivering the best care at lower costs to Oregonians.”  

The bill currently sits in the Joint Committee On Ways and Means where it awaits its first public hearing.