Health systems are looking to combine their resources through mergers and acquisitions as financial challenges plague the industry. Now, state lawmakers want a hand in the deal.
A flurry of merger oversight bills are on legislators' tables in states nationwide, although they are not the first of their kind. In 2021, Oregon passed its Health Care Market Oversight program, which allows the state's health authority to review and approve healthcare mergers and acquisitions. Although it was touted by the state as a way to preserve competition and regulate higher costs and service cuts, the Oregon Association of Hospitals and Health Systems filed a lawsuit in October asking to overturn it — citing vague terms and poor timing, as hospitals posted significant losses during its launch.
In March 2022, a similar law was passed in Indiana, requiring the state's health department to actively supervise hospital mergers and study their effects on the community.
These three states have also recently proposed hospital merger oversight bills:
1. North Carolina: Senate Bill 16, titled Preserving Competition and Health Care, would require health systems to submit merger and acquisition proposals to the state's attorney general for review. The attorney general would have 90 days to review each request, and hospitals and health systems that fail to meet the proposed terms could be fined up to $1 million.
The bill was introduced following high-profile mergers in the state — including the combination of Charlotte, N.C.-based Atrium Health and Downers Grove, Ill.- and Milwaukee-based Advocate Aurora Health in December, which created the fifth-largest nonprofit health system in the U.S.
2. Minnesota: HF402 — formed in response to a controversial merger proposal between Fairview Health Services in Minneapolis and Sanford Health in Sioux Falls, S.D. — would give Minnesota's health department power to approve or deny hospital mergers based on potential effects on patients and communities.
If passed, any proposed mergers would have to be submitted to the state 180 days in advance, and would undergo a public input process before the health commissioner gives clearance.
3. Washington: SB5421, or the Keep Our Care Act, would allow the state's attorney general to publicly review proposed healthcare mergers, acquisitions and affiliations. If the proposal could diminish access to affordable end-of-life, gender-affirming or reproductive care services, the attorney general can strike it down.
The proposed law responds to restrictions Catholic health systems place on certain care plans, according to the Seattle Times.