Oregon’s HCMO program provided valuable oversight on major healthcare consolidation initiatives in first year of operation


Shane Ersland


Oregon’s Health Care Market Oversight (HCMO) program has only been operating for a little over a year, but it has reviewed several important transactions in that time, and a new report discusses what other states can learn from its efforts to monitor industry consolidation.  

The Oregon Health Authority (OHA) reviews proposed business deals through the HCMO program to ensure they will lower patient costs, increase access to service, improve care, and promote health equity. The state legislature passed House Bill 2362 in 2021 to create the program in order to oversee healthcare consolidation, and it began operating in March 2022.

“Stronger market oversight is an emerging strategy, and was recommended for the state to get a handle on costs,” HCMO Program Manager Sarah Bartelmann told State of Reform. “Consolidation has been increasing nationally. We’re seeing that across the board in rural hospital closures and private equity. There’s been a lot of that, and [we’ve seen] the problems it can lead to. Protecting the services Oregonians have access to is a priority.”

The program has already completed six transaction reviews, and is in the process of reviewing two more. It approved Amazon’s request to purchase One Medicala primary care organization that operates more than 180 medical offices across the country, including five primary care clinics in Oregonin December 2022. 

Amazon announced plans to acquire One Medical for $3.9 billion in July 2022, and OHA released a report about HCMO’s findings on the transaction on Dec. 28th, 2022. The program conducted a 30-day preliminary review of the proposed transaction, assessing the deal’s likely impacts on healthcare cost, access, quality, and equity. OHA held a 14-day public comment period on the proposal, and received 36 comments. Although many comments opposed the transaction, the report found it unlikely to substantially reduce access to affordable healthcare in Oregon.

Bartelmann said it was an interesting transaction to consider, but Amazon ultimately met all the program’s requirements, which include consideration of:

  • Potential impacts on the local community
  • Distance to service, which is important in a situation in which a hospital could close, to determine where the next nearest facility is
  • What type of market share an involved organization has
  • Impacts on transparency, access, cost, equity, and quality of care

“In terms of cost, we know consolidation tends to drive up costs,” Bartelmann said. “We look at what their current costs are, and [if] we expect increases in costs. And whether that translates to a better deal for the consumer or not.”

Milbank Memorial Fund released a report in March that examines HCMO’s work to address the unchecked rise in consolidation in the industry. The report calls the program “one of the strongest merger oversight programs in the country.” By studying the program, the report found that other states considering implementing a similar one should ensure the following items to make it effective:

  • State policymakers need a detailed understanding of the drivers of healthcare costs in the state.
  • State legislators should aim to give a healthcare market oversight program as much authority as possible to allow flexibility. 
  • States should strike a balance when deciding the breadth of review to use state resources effectively.
  • States should strive for a high-level of transparency and public participation, as both are critical to effectively review transactions and minimize the risk of regulatory failure. 
  • Any imposed conditions should be enforceable and targeted.

Bartelmann said one thing that makes HCMO so promising compared to other states’ programs is the authority it wields in the decision-making process.

“Other states have bits and pieces, but not the breadth of these charges,” she said. “We are currently the most aggressive state; we have the most authority. Oregon’s program is unique in that we can say ‘No, this is not good for Oregon.’ And the report really highlights that. Other states that do reviews can make a recommendation, but we have the direct scope of authority. We can be the final say.”

HCMO will continue to focus on increasing transparency moving forward. Before the program began, residents didn’t have as much information about transactions as readily available as it is now, Bartelmann said.

“Before this program existed, these communities might not have known about these transactions,” she said. “We’ve been able to provide a lot more transparency before the deal closes. Being able to create a space for public comment is big.”

HCMO utilizes a team of four full-time staffers, and can utilize contractors if needed.

“As we continue to do follow-up reviews, we’ll have a much better sense of things we may have missed that we can incorporate into future transactions,” Bartelmann said. “The way we do our transaction review is very flexible. But every transaction is different.”