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Washington Legislature Advances Controversial Proposal to Regulate Hospital Mergers

Credits: The Spokesman-Review

A contentious bill recently passed the state Senate in Washington, potentially impacting hospitals and health systems by requiring them to disclose more information about the effects of mergers on the care they provide.

Senate Bill 5241, receiving support exclusively from Democrats, seeks to intensify regulations surrounding the combination of hospitals and health systems. Advocates argue that increased regulations can result in healthcare becoming more expensive and less accessible.

The driving force behind the bill lies in Democratic concerns about safeguarding access to abortion, reproductive care, and gender-affirming services, particularly within healthcare organizations affiliated with religious institutions.

Hospital Merger (Credits: Washington State Standard)

On the opposing side, Republicans express apprehensions about the bill burdening small hospitals with additional bureaucracy. They also question the extent of power granted to the attorney general, as the bill empowers the state attorney general with the authority to block or oversee mergers.

Sen. Emily Randall, the bill’s sponsor, asserts that the legislation is aimed at protecting the interests of communities and ensuring that business interests do not override considerations for patients and the workforce.

Under the proposed legislation, hospitals and health systems undergoing mergers or purchases would face new reporting requirements. This includes providing documentation detailing how changes in leadership would impact access to various types of care, such as reproductive, gender-affirming, emergency, charity, and end-of-life care.

Furthermore, the bill grants the Attorney General’s Office the power to determine whether the transaction would negatively affect the community’s access to affordable healthcare.

The bill narrowly passed with a 28-21 vote after three hours of debate, with Sen. Mark Mullet being the only Democrat to vote against it. Opponents argue that the bill may have unintended consequences, particularly for small, rural hospitals already grappling with financial challenges.

The proposal is not new, having been introduced previously as part of a comprehensive legislative effort to expand and safeguard access to reproductive healthcare in Washington, following the 2022 decision in Roe v. Wade.

A significant portion of Washington’s hospital system, including organizations like Providence Health and PeaceHealth, is affiliated with religious entities.

Advocates contend that this affiliation can often restrict access to certain types of healthcare. According to a 2023 analysis by The Seattle Times, over 48% of hospital beds in the state are affiliated with religious organizations.

Sen. Randall emphasizes that the proposed oversight aims to preserve access to reproductive healthcare, aligning with the desires expressed by Washington voters over the decades. She emphasizes that having a right without access is not a meaningful right, and erosion of access to abortion care could deprive neighbors of essential healthcare services.

Supporters of the bill argue that mergers can result in higher costs for patients without necessarily offering additional services. Sen. Patty Kuderer considers the proposal one of the most consequential healthcare bills of the session, stating that consolidation in the healthcare system is not in the best interest of consumers.

Research from the Kaiser Family Foundation (KFF), a health policy research organization, indicates that provider mergers and hospital consolidations can lead to increased prices and reduced access to care.

In response to concerns raised by Republicans, Sen. Ann Rivers highlights that hospital mergers do not always involve large corporations but can include partnerships between small hospitals and specialized care clinics.

However, opponents of the bill argue that it could bury small hospitals in paperwork, with Sen. Shelly Short describing it as a “one-size-fits-all” approach that may not suit the needs of rural hospitals.

The financial struggles of hospitals in recent years, exacerbated by the COVID-19 pandemic, have raised concerns about the potential impact of the bill. The Washington State Hospital Association testified against the policy, emphasizing the dire financial situation of hospitals.

The proposed legislation empowers the attorney general to disapprove of a merger or impose specific conditions. Additionally, the attorney general would be required to monitor any approved transaction for at least a decade to ensure that access to care and affordability are not compromised.

Republicans contest the granting of such authority to the attorney general, suggesting that if oversight were necessary, the state’s Department of Health would be better suited to handle it.

Nevertheless, Sen. Manka Dhingra argues that the attorney general is the most suitable individual to oversee the complex healthcare system, citing existing processes within the office designed to protect consumers.

The bill is now set to move to the state House of Representatives, where it will undergo the committee process and must secure passage in the full chamber before the legislative session concludes on March 7.

The Washington State Standard, a nonprofit, nonpartisan news outlet, provides original reporting, analysis, and commentary on Washington state government and politics, aiming to keep the public informed about critical issues, legislative decisions, spending patterns, and influential figures shaping public policy.

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