Fears about transparency, access to capital cited as leaders consider hospital merger oversight bill

Jun. 17—When New Mexico hospitals change hands, consumer advocates want more transparency and ways for community members to weigh in.

Some business advocates want to make sure proposed regulatory oversight of those deals isn't so heavy-handed it stems the flow of capital into what they describe as an already arid landscape.

And New Mexicans from the state's rural outposts want to make sure the ideas shaping that oversight don't all come from Santa Fe and Albuquerque.

Those are a few of the themes to emerge in the last week and a half, as state officials and lawmakers kicked off an effort to gather input as they push to give state government regulatory power over hospital mergers and acquisitions.

It's a process expected to last several months.

State Sen. Katy Duhigg, an Albuquerque Democrat who this year co-sponsored what ultimately passed as a compromise measure giving the state Office of Superintendent of Insurance oversight of those deals until July 1, 2025, said in an interview Monday the next few months will be about getting input from all quarters as she and others try to craft what they hope will be a permanent law.

"The point of these kind of initial [meetings] are for us to listen, and for people to start sharing their thoughts and ideas and concerns with us," Duhigg said.

Worries about an increase of acquisitions by out-of-state and private equity-backed corporations are driving the proposal. Insurance Superintendent Alice Kane said there are concerns the trend could drive New Mexico health care costs up and accessibility and quality down.

Under the temporary law, the Office of Superintendent of Insurance would consider whether proposed deals would reduce or eliminate access to essential services, drive up costs, affect quality of care or stifle competition.

The office could then approve the deal outright, impose conditions for approval or block the transaction.

Work on the new bill kicked off with a town hall-style event June 7 in Albuquerque, followed by individual, closed-door meetings with consumer advocates, practitioners, insurance carriers and hospital leaders Friday and Monday, Duhigg said.

Kat Sánchez, policy director for reproductive rights organization Bold Futures, pointed during the June 7 event to the 2023 acquisition of Otero County's Gerald Champion Regional Medical Center by Catholic company Christus Health as a time when local residents felt left in the dark. That acquisition raised concerns community members could lose access to reproductive health care, media outlets reported at the time.

"Community members had little to no opportunities to ... understand that it was getting acquired or have input about the acquisition," said Sánchez, who urged lawmakers to include avenues for public comment in a permanent bill. "They need to know who is coming in, who is going to take care of them."

Rob Black, president and CEO of the New Mexico Chamber of Commerce, said he's concerned about setting up more barriers to hospitals' access to capital.

"We're a market that can be forgotten and we often are," Black said during the event. "... We are concerned that inserting government into private business dealings will make it harder for us to have access to that capital."

Duhigg said it was clear from the first meeting "we need to go all over the state," in response to requests that rural communities get their seat at the table. She said public meetings will be scheduled in Gallup in July, in Alamogordo and Las Cruces in August, and in Taos and Las Vegas, N.M., in September. Details for those meetings haven't yet been finalized.

Duhigg said a closed-door session with health care providers also highlighted concerns about another way private equity companies are finding ways into the halls of New Mexico hospitals: by obtaining staffing contracts at local facilities.

It's a trend that's touched Santa Fe fairly recently, when Christus St. Vincent contracted with a private equity-backed staffing firm to employ its obstetrics providers — a move hospital leaders said aimed to help improve recruitment. Last month, the hospital's Texas-based owner formed a new clinical company in partnership with a private equity-backed staffing company based in Georgia.

Duhigg said Christus St. Vincent was one of the New Mexico hospitals whose contracts were discussed, but not the only one.

"We got to hear about how these staffing contracts with private equity companies are impacting our independent providers in a way that we had not heard before," she said.

A hospital hiring a staffing company isn't a merger or an acquisition, but Duhigg said the discussion showed "we need to think creatively and think outside the box."

"There are a lot of different mechanisms that could potentially create the same harm that we're trying to avoid with this bill," she said. "If we are focused just on acquisitions and mergers and kind of the corporate structure stuff, we are likely to ... solve the problem in a very incomplete way."