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Sat. Jul 20th, 2024

New law gives government officials more oversight of hospital purchases • Source New Mexico

By Vaseline May30,2024

Hospital takeovers are growing across the country, leading to higher prices for patients. Many of these deals involve private equity, often cutting back on certain care to boost profits, or involving religious organizations that refuse forms of care they do not support.

New Mexico is particularly at risk for deals that could limit health care. There is also a new law that could curb that.

Last year, Otero County’s only hospital, Gerald Champion Regional Medical Center, signed a merger agreement with a Catholic nonprofit with very little local input. The county also contains Holloman Air Force Base and the Mescalero Apache Reservation.

Kat Sánchez, religious denials coordinator for Bold Futures in New Mexico, said the deal curtails residents’ health care options, especially when it comes to care that the Catholic Church does not support.

“We’ve heard from people who have already started canceling scheduled vasectomies before the paperwork was even signed to allow the merger to go through,” she said.

Advocacy groups such as Bold Futures and the American Civil Liberties Union of New Mexico called on players in the deal to delay the deal, outline what the impact would be on residents and seek community input.

“One of the things we heard was that leaders said very clearly that they had no say in the takeover that took place there,” Sánchez said.

Once the deal went through, she and her colleagues knew there was nothing they could do to reverse it, but they saw it as a warning of what could happen to health care in other vulnerable communities in New Mexico.

“It seems like the mergers and acquisitions are happening more often across the country, and also in rural areas,” she said.

New Mexico is especially at risk. New Mexico Hospital Association President Troy Clark told lawmakers at a Legislative Finance Committee interim hearing last year that more than two-thirds of New Mexico hospitals had been in the red in the previous 12 months.

And it’s not news to many New Mexicans that the state has a lack of health care providers. According to the Rural Health Information Hub, all but one of the 32 counties are facing an overall shortage of health care professionals.

Majority Whip Reena Szczepanski said she is especially getting a lot of calls about maternity care, which a third of New Mexico counties currently lack.

“We have had a number of hospitals in the state that have stopped offering these services altogether or are open with very limited hours. All of that is very important to the community,” she says.

Szczepanski said healthcare providers in New Mexico are strapped for cash.

“We are a unique health care market in some ways, if you look at it from an economic standpoint, in that we have a lot of people in our state who are covered by public programs, both Medicaid and Medicare,” she said.

These programs typically make less money than private insurers. Szczepanski says she worries that financial instability will draw the attention of potentially predatory groups, such as private equity firms.

Earlier this year, a report also placed New Mexico at the top of the list for private equity risk.

“That model is fundamentally at odds with a focus on the public interest in health care,” said Chris Noble, policy director of the Private Equity Stakeholder Project, which released the report. He said that when private equity, in particular, gets involved in health care, leadership focuses on making quick profits for investors over improving the hospital’s functions.

Usually they do this by cutting back on staff, even though the staff is already struggling to meet the needs of patients. Or they cut back or raise prices.

Noble said more and more state governments are realizing the impact this is having on public health.

“You’re seeing a big increase in these laws in recent years,” he said.

Most states require some notice of a transaction involving a health care organization, and many require state approval. New Mexico joins that group this year.

Senator Katy Duhigg and Representative Reena Szczepanski co-authored the Health Care Consolidation Oversight Act, which gives the state a say in hospital mergers and acquisitions.

Senator Duhigg said the lack of regulation in this area has left the state vulnerable.

“It was ripe for the picking, and that made it a very attractive area for these companies to establish themselves because they could basically do whatever they wanted,” she said.

The law says that the management of organizations that want to merge must report this to the chief inspector of insurance. It must also demonstrate that the transaction will not lead to bad outcomes for patients, such as higher prices or limited availability of services.

“This is really a monopoly issue,” Duhigg said. “This is an antitrust issue and we don’t have great antitrust laws here in New Mexico.”

The law is only in effect until July 1, 2025. Duhigg said that’s because she and her colleagues are working on a more comprehensive law with more community input and ideas from other states, with the goal of getting through the longer, two-year term. month of parliamentary session. She said the current law is not enough.

“He actually has no teeth. There is no enforcement mechanism. There is no transparency,” she said.

But for now, Duhigg says this gives the state a way to track transactions and see where they could be hurting the state’s health care system, which wasn’t the case before.

This reporting is made possible by the WK Kellogg Foundation and KUNM listeners.

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