Concerned about hospital closures and increased patient burdens, state lawmakers are increasingly at odds with hospitals over potential medical mergers, in some cases derailing deals they don’t think are in the public interest.
Financially strapped hospitals often consider merging with or acquiring other systems. After the pandemic-era economic slowdown, healthcare mergers and acquisitions picked up. rose steadily In the last two years. But some proposed hospital deals in states such as Connecticut, Louisiana and Minnesota have stalled after fierce opposition from lawmakers, labor and grassroots organizations.
At least 10 healthcare “megadeals” have been made called or rewound Just last year, the industry publication Becker’s Hospital Review reported on increased scrutiny.
“We’ve seen across the country situations where a lot of promises were made in certain health care deals, and when you look at them, clinics are closing, prices are going up,” said Minnesota Attorney General Keith Ellison (D). “Access is decreasing.” state line.
When Ellison learned that Minnesota-based Fairview Health Services intended to merge with Sanford Health, a larger health system based in South Dakota, he faced re-election in late 2022. He was in the middle of an election campaign.
proposed transaction aroused severe criticism Feedback from Minnesota Democratic lawmakers, nurses unions, University of Minnesota leaders, and community groups. Fairview owns the University of Minnesota Medical Center, which is funded by state taxpayers. If the system were to be integrated, Minnesota tax dollars could be spent across state lines. Some lawmakers also argued that the resulting system could create local medical monopolies, leading to decreased services and increased costs for patients.
Across the country, we’ve seen situations where a lot of promises were made in a particular healthcare deal, only to find that clinics are closing, prices are rising, and access is decreasing.
– Minnesota Democratic Attorney General Keith Ellison
As the Fairview-Sanford agreement progressed, Ellison’s office held public hearings across the state. And while Fairview and Sanford officials said the merger would allow the systems to expand care, and some residents expressed support for the deal, the overall sentiment among stakeholders was negative. Ellison recalled.
On the other hand, Democratic politicians passed the bill In May 2023, it will ban anticompetitive health care mergers and strengthen state oversight of potential transactions. It was signed into law that same month.
Two months later, Sanford Health canceled the merger Due to lack of support from “special stakeholders in Minnesota.”
Hospitals with financial difficulties
In March 2023, Massachusetts-based Covenant Health I canceled my purchase plan. A small, struggling health system in the northeastern corner of Connecticut.More than a quarter of healthcare deals announced in the US last year Involved a financially distressed partnerAccording to consulting firm Kaufman Hall.
community group rallied against the agreementwas concerned that Covenant’s acquisition would lead to cuts in reproductive health and other services. Covenant is a Catholic system that follows a set of rules called the Ethical and Religious Directive for Catholic Health Services, which prohibits the provision of some types of health care through this system. These include emergency contraception, fertility services, gender-affirming care, abortion, and some end-of-life care.
“The root of my concern was the fact that this was a Catholic medical institution following Catholic directives,” Connecticut State Representative Gillian Gilchrest, a Democrat, told Stateline. “Health care options are already limited in that part of the state, and one of his family planning clinics in the area recently closed.
“There was concern that women in the northeastern corner of Connecticut would not have access to reproductive health care.”
Some states support hospital mergers despite record of service cuts and price increases
Some local residents Worried Without the Covenant takeover they would lose the hospital, but the others formed a coalition It urged the state to reject the proposed acquisition. Gilchrest, along with 15 other Democratic state legislators, letter opposed to the agreement.
that fell A few months later.
Steve Grubbs, President and CEO of Covenant, said: statement The company announced the termination of the contract, stating that “the partnership is no longer economically viable.”
Day Kimball Healthcare CEO R. Kyle Kramer said the system’s leadership:It was disappointingIn a statement released shortly after the announcement, Covenant announced that it had decided not to acquire the company.
“We are immediately pursuing the best path forward for Day Kimball, working with local and state officials to maintain essential hospital services in our northeastern Connecticut community, and working with future “We look forward to exploring discussions with potential partners,” Kramer’s statement said.
Gilchrest said he hopes Connecticut lawmakers will do more to protect services that will be eliminated as some hospitals merge, especially women’s health services.
“Unfortunately, I feel like we’re not quite there yet,” she told Stateline. “As a result of many of these mergers, services such as labor and delivery departments continue to close across Connecticut when it comes to women’s reproductive health care.”
Further backlash
This year, Louisiana faced pushback from state lawmakers and community groups. The proposed $2.5 billion sale has been suspended. Transfer of Louisiana nonprofit Blue Cross and Blue Shield to for-profit insurance giant Elevance Health.blue cross had defended the proposed sale It argued it would help nonprofit insurers curb rising health care costs and become more competitive with domestic rivals.
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Last month, Louisiana state senators Report sent He told the state Insurance Commissioner that he had “issues” with him, including the fairness of contracts, Blue Cross’ alleged efforts to influence policyholder votes, and Elevance’s fines, penalties, lawsuits and premium increases. Outlined the past. The Louisiana Hospital Association, other medical groups and the state treasurer also opposed the deal.
Louisiana Sen. Jeremy Stein, a Republican, said he plans to introduce a bill this Congress that would prevent deals like the proposed Blue Cross sale from taking effect unless they meet certain consumer protection standards. .
“The proposed sale of Blue Cross Blue Shield to Elevance Health raises concerns about the potential impact on Louisiana’s health care landscape,” Stein said in a statement to Stateline.
“By putting these safeguards in place, we aim to prevent undue influence, personal gain and hasty decision-making that could harm the health and well-being of our communities.”
Back in Minnesota, the attorney general’s office has reviewed nearly a dozen proposed health care deals in the less than a year since the new law was passed.
“We were not given advance notice before this law was passed.” [of a merger or other transaction] Unless the parties tell us,” said Elizabeth Odette, manager of the antitrust division of the Minnesota AG’s office.
“In some cases, that meant there wasn’t much that the parties could meaningfully do before closing the deal.”
But stronger legislation would allow “not just our offices, but also the public and [involved] “Both parties should take more time to consider the implications of the proposed mega-merger,” she said.
