By Patrick G. Lee, ProPublica
Mergers have become commonplace as hospital mega-chains increasingly dominate the American health-care market. But these deals often go unscrutinized by state regulators, who fail to address potential risks to patients losing access to care, according to a new report (pdf) released today.
MergerWatch, which analyzes the hospital industry and opposes faith-based health care restrictions, surveyed health care statutes and regulations in all 50 states and the District of Columbia. It found that only 10 states require government review before hospital facilities and services can be shut down. Only eight states and the District of Columbia mandate regulatory review when hospitals enter into more informal partnerships rather than full-scale mergers, closing a loophole that exists in other states for deals to pass with minimal state oversight.
Smaller, local hospitals often agree to merge with larger chains in order to survive. The goal is to cut overlapping services, negotiate better deals with insurance companies and share in the cost savings. But without state protections, local residents can see health services disappear, sometimes without a chance to weigh in.
“In a number of states, there is no oversight at all. So hospitals are just doing what makes business sense for them,” said Lois Uttley, one of the report’s co-authors and the director of MergerWatch. “Someone needs to be looking out for the patients and the community.”