Decades of market-driven hospital and health system consolidation have left too many communities across the United States without timely access to needed care as the nation continues to struggle with the COVID-19 pandemic. The people most affected by hospital downsizing and closings have been Black, Latinx, Indigenous and other people of color, as well as those who are uninsured, immigrants, women, LGBTQ+ people, people with disabilities and vulnerable older adults.

Both urban neighborhoods of color and residents of rural areas have suffered as independent hospitals have closed or joined big health systems that then close such services as intensive care, labor and delivery, psychiatric care and cardiac care – forcing patients who need those services to travel out of their home communities to system “hub” hospitals.  When the acquiring system is religiously-sponsored, community hospitals often are forced to eliminate or restrict key reproductive and maternity services and prohibit gender-affirming care and certain end-of-life options. When the acquiring system is one of the private equity firms now active in the health sector, a community hospital may be stripped of its assets, loaded up with debt and forced to lay off staff – leaving its patients with a shell of a hospital.

What can be done to protect access to care for medically-underserved people and promote health equity through government oversight of health industry transactions? Two states – New York and Oregon – have new laws on the books this year designed to make health equity a consideration when state regulators are reviewing proposed changes in hospitals and other health facilities. There are also possibilities of action at the federal level. A Community Catalyst webinar on April 21 at 2 p.m. EST will explore these policies and opportunities for advocates to advance health equity through oversight of health delivery system changes.

New York’s Health Equity Assessment Act

New York’s new law, S1451A, was signed by Gov. Kathy Hochul in late December after a year-long campaign by the Community Voices for Health System Accountability (CVHSA) and Health Care for All New York (HCFANY) coalitions. The law requires an independent assessment of how proposed health facility changes, such as reductions or elimination of services, would affect access to care for medically-underserved individuals and communities. “Medically-underserved” is defined in the law to include “racial and ethnic minorities,” immigrants, women, LGBTQ+ people, people with disabilities, uninsured people and those with public insurance (such as Medicaid) as well as older adults, rural residents and people living with “a prevalent infectious disease or condition” (such as HIV).

Health facilities will be required to commission health equity assessments by independent entities (potentially schools of public health, for example) and submit them when filing Certificate of Need (CON) applications for state approval of proposed health facility transactions. The assessment process must include meaningful engagement with the affected community and must describe the extent to which the project would provide indigent care (both free and below cost), the availability of public or private transportation to the facility, the means of ensuring effective communication with non-English speaking patients, as well as those with speech, hearing or visual impairments and the extent to which the project would reduce architectural barriers for people with mobility impairments. The final assessment document must be posted on the health facility’s website, as well as the NYS Department of Health website, where community members could read it and submit comments.

While the law does not require the disapproval of projects that don’t fare well in health equity assessments, it will certainly encourage health facilities to include provisions that address the needs of medically-underserved people, in order to secure state approval. Moreover, the assessments will provide valuable information for New York State Department of Health (NYS DOH) officials and members of the Public Health and Health Planning Council (PHHPC), which votes on major CON applications. Officials could potentially attach conditions to approval of projects, in order to improve the health equity impact. The effective date of the law, which was originally six months from signing, was extended out to 18 months by the Governor’s office, to allow for rulemaking by the NYS DOH and the PHHPC. Health advocates are preparing for robust involvement in this rulemaking process.

Oregon’s New Health Market Oversight Program

In Oregon, HB2362 was signed into law on September 25 by Gov. Kate Brown. This measure gives the Oregon Health Authority (OHA) jurisdiction over large-size proposed mergers, acquisitions and affiliations. The authority could deny approval if the applicants cannot show that the transaction would increase access to services in medically-underserved areas, improve health outcomes or reduce patient costs. Transactions that would cause a loss of services essential to achieving health equity (including, but not limited to, most of those on a pre-existing state list of “essential services”) would receive special scrutiny.

Rulemaking to implement the new law is moving quickly, since the effective date is six months from signing of the law, which will be March 1, 2022. The OHA assembled a Technical Advisory Group that reviewed proposed guidance and took comments from advocates and health facilities in public meetings. Discussion focused on which services are essential to achieve health equity and how to measure whether a proposed reduction in those services is “significant.”

The pre-existing state list of funded essential services includes treatment for 472 conditions, including pregnancy, substance use disorders, prevention services, reproductive health services, diabetes and many other conditions, as well as prevention services. Final guidance released this week added to the list of essential services any needed treatments for chronic conditions, all pregnancy-related conditions (in addition to those previously listed as essential), health system navigation and coordination services and non-clinical prevention services, such as programs encouraging physical activity.  In order to decide which additional services should be included, the OHA utilized the following definition of health equity:

Oregon will have established a health system that creates health equity when all people can reach their full health potential and well-being and are not disadvantaged by their race, ethnicity, language, disability, age, gender, gender identity, sexual orientation, social class, intersections among these communities or identities, or other socially determined circumstances. Achieving health equity requires the ongoing collaboration of all regions and sectors of the state, including tribal governments, to address:

  • The equitable distribution or redistribution of resources and power; and
  • Recognizing, reconciling, and rectifying historical and contemporary injustices.

To guide decisions about what constitutes a “significant” reduction in services, which would trigger state review of the transaction, the OHA final guidance issued this week specified such metrics as a predicted 33 percent or greater increase in travel time or distance for existing patients to alternative providers; a decrease of 33 percent or more in the availability of trained culturally competent providers, health care interpreters or clinicians taking new patients  or serving uninsured individuals; or a decrease of 33 percent or more of any essential service as a result of restrictions being placed on clinicians’ ability to provide, discuss or refer for such services. Final guidance requires entities to consider any significant reduction of essential services that will occur within 12 months of the effective date of the transaction that is intended, anticipated, or under the entity’s control. Advocates had urged a longer time period.

Federal Action possible

There is also potential for action at the federal level, where President Joe Biden’s Executive Order on industry consolidation is prompting examination of the impact of health industry consolidation on access to services, as well as price. Biden said hospital mergers “left many areas, especially rural communities, without good options for convenient and affordable health care service.” That order followed a Biden administration request for suggestions on how to ensure health equity is included in all government policies, programs, services, processes and operations.

On January 18, the Federal Trade Commission (FTC) and Justice Department announced they were launching a public inquiry and seeking comments on proposed revisions to the guidelines by which they evaluate proposed mergers for anti-competitive effects. Comments are due by March 21.

Look out for an announcement from Community Catalyst about our webinar on April 21 at 2 pm, and information about how you can register. If you are interested in learning more about these policy opportunities before then, you can contact Lois Uttley at: luttley@communitycatalyst.org.