State oversight is sparse for healthcare mergers

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As hospital merger-mania continues, many consumer watchdogs have questioned whether this level of consolidation hurts consumers, and state oversight of their impact is falling short, according to a new report from Merger Watch.

The group's survey of state-level regulations and statutes found a government review is only required before shutting down hospital facilities or services in 10 states. Meanwhile, only the District of Columbia and eight states require hospitals entering less formal "non-merger mergers" to undergo a regulatory review. Only six states require public hearings for every merger application. While such mergers are often necessary for smaller community facilities to survive, the report's authors say much of this consolidation threatens to eliminate health services the hospitals' communities need.

"In a number of states, there is no oversight at all. So hospitals are just doing what makes business sense for them,"  Lois Uttley, one of the report's co-authors and the director of MergerWatch, told Pro Publica. "Someone needs to be looking out for the patients and the community."

These issues intersect with concerns that Catholic hospitals' increased M&A activity with other facilities may lead to reduced reproductive health and end-of-life care services at such facilities. But even when Catholic hospitals aren't involved, many non-profit hospitals cut vital but expensive services such as emergency care, neo-natal intensive care, obstetrics and pediatrics after for-profit systems take ownership, according to the report.

The authors blame much of this inadequate oversight on outdated regulations; many of the relevant statutes were written decades ago when the primary concern for hospital consolidation was redundant services. Since then, however, the number of hospitals providing short-term acute care has shrunk by about 240 even as the pace of consolidation in the industry quickens.

To learn more:
- download the report
- here's the Pro Publica article

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