Today, the Oregon Health Authority announced the launch of the new Health Care Market Oversight (HCMO) program, which was set up by HB 2362 in the 2021 Legislative Session. This law directs OHA to review business deals that consolidate the health system in a way that could impacts, costs, quality, access and equity for Oregonians. As of the launch on March 1, large health care entities such as hospitals, health insurance companies, and provider groups proposing to merge or acquire other entities must file notice with the HCMO program. The review process also allows for the community to understand the potential impacts of a transaction and weigh in.
“OHA is pleased to launch this important program, which will provide the community an opportunity to learn about and weigh in on large mergers and acquisitions in the health care sector,” said Jeremy Vandehey, Director of the Health Policy and Analytics Division at OHA. “This will increase transparency around proposed transactions that could significantly change the health system in a local community. As we see increased health care industry consolidation nationwide, it’s deeply important that we make sure that improving health care for consumers and community is at the center of health care market transactions, not an afterthought.”
Consolidation is increasingly common across the U.S., resulting in health care markets with fewer small or independent providers and more large, national companies.[1] Between 2010 and 2017, there were 778 hospital mergers in the United States.[2] In 2014, 24% of physician practices were owned by hospitals and health systems; by 2018, it had increased to 46%.[3]
Like regions across the country, Oregon continues to see the impacts of health care consolidations. Here are some examples seen in Oregon:
- Prices for health care in the Portland metro area are higher than the national average and have continued to rise each year.[4]
- Most physicians in the Portland metro area work for health systems. In 2016, 39% of Portland metro physicians worked for health systems. In 2018, 71% worked for health systems.[5]
- In 2003, 43% of Oregon’s hospitals were independent; by 2020, 25% were independent.[6]
Understanding the potential impacts of a proposed transaction is not the only goal of the HCMO program. It also aims to:
- Promote transparency: OHA will track and publicly post notices when health care transactions occur. Communities will know about planned transactions and will have the ability to voice their perspective as part of the review process.
- Support statewide priorities: Ensure that health care consolidation in Oregon supports statewide goals related to lower costs, greater health equity, increased access, and better quality.
- Monitor impacts: OHA will analyze the type, number, and frequency of transactions, and evaluate how transactions impact people in Oregon. OHA will produce statewide reports related to the impacts of health care consolidation.
“Although some other states review proposed transactions, OHA and the HCMO program are the first in the nation to begin to tackle this issue in a systematic and meaningful way and with a focus on health equity,” said Vandehey. “We look forward to continuing to understand the contours of these transactions and what their effect might be on our health care delivery system. The Legislature was careful to note that people in Oregon want safe, affordable, high-quality care delivered in an equitable manner in their community. We will be making sure that future transactions adhere to this vision.”
More information
For more information about the Health Care Market Oversight program.
Visit our website at https://www.oregon.gov/oha/HPA/HP/Pages/health-care-market-oversight.aspx
Email at [email protected]
Subscribe to program updates at https://public.govdelivery.com/accounts/ORDHS/subscriber/new?topic_id=ORDHS_999
Please see ORS 415.500 et seq. and OAR 409-070-0000 through 409-070-0085 for legal requirements.