CA Hearing Tomorrow on Regulating For-Profit Health Industry Mergers
Tuesday, June 21, 2022
Health industry mergers are a major driver of high health care costs, and now, California lawmakers are considering a bill to regulate more of these mergers.
Assembly Bill 2080 gets a hearing in the Senate Health Committee Wednesday. It would give the state Attorney General the power to place conditions on, or even block, mergers of for-profit hospitals and other major health care entities.
The California Hospital Association opposes the bill, arguing it would give the Attorney General too much power and stifle many types of care arrangements.
Anthony Wright, executive director of the nonprofit advocacy group Health Access California, countered more protection is needed for consumers.
"This bill goes to the heart of why health care costs are so inflated," Wright argued. "And it makes sure that there is public oversight, so that access is preserved and costs are not inflated as the health industry consolidates."
The Attorney General already has the oversight power to review nonprofit hospital mergers, and in 2019, secured a $575 million settlement from Sutter Health over charges they drove up prices. Sutter, the largest health care provider in northern California, agreed to end what the state considered anticompetitive policies. The bill would ban anticompetitive contracting industrywide.
Wright pointed to a 2018 University of California-Berkeley study, which found hospital mergers have resulted in much higher prices.
"Sometimes there can be a loss of access if the acquiring entity decides to shut down certain services," Wright explained. "Sometimes the merged entity now has more market power, in order to charge higher prices."
The bill also includes an appeals process if a merger is denied. The measure has already passed in the State Assembly. If it passes in the Senate Health Committee, the next stop would be the Judiciary Committee.
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