The new law gives government officials greater oversight of hospital takeovers

Hospital foreclosures are on the rise across the country, leading to higher prices for patients. Many of these deals involve private capital, which often makes cuts to certain types of care to increase profits, or religious organizations, which may refuse to use types of care they do not support.

New Mexico is particularly at risk from deals that could limit health care. There is also a new law that could prevent this from happening.

Last year, Otero County’s only hospital, Gerald Champion Regional Medical Center, signed an agreement to merge with a Catholic nonprofit with very little local input. The county is also home to Holloman Air Force Base and the Mescalero Apache Reservation.

Bold Futures New Mexico’s religious denial coordinator, Kat Sánchez, said the agreement limits residents’ options for health care, especially that which the Catholic Church does not support.

“We have heard from people that they have already started canceling vasectomies scheduled before the merger documents were signed,” she said.

Advocacy groups such as Bold Futures and the American Civil Liberties Union of New Mexico have urged participants in the agreement to slow down the process, determine the impact it will have on residents and seek community input.

“One of the things we heard was that the leadership said very clearly that they had no say in the takeover that took place there,” Sánchez said.

Once the deal was made, she and her colleagues knew there was nothing they could do to undo it, but they took it as a warning about what could happen to health care in other vulnerable New Mexico communities.

“It seems like mergers and acquisitions are happening more across the country and in rural areas,” she said.

New Mexico is particularly at risk. New Mexico Hospital Association President Troy Clark told lawmakers last year during an interim Legislative Finance Committee hearing that more than two-thirds of New Mexico hospitals had reported losses in the past 12 months.

For many New Mexicans, the fact that the state lacks health care facilities is nothing new. According to the Rural Health Information Hub, all but one of the 32 counties are facing an overall shortage of health care workers.

House Majority Whip Reena Szczepański said she’s been receiving a lot of calls, especially about maternity care, which is currently in short supply in a third of New Mexico counties.

“There were many hospitals across the state that either stopped providing these services completely or began operating on very limited hours. All this raises great social concern,” she added.

Szczepański said health care facilities in New Mexico are strapped for cash.

“In some ways, we are a unique health care market when you look at it from an economic standpoint because many people in our state are covered by public programs, both Medicaid and Medicare,” he added. she said.

These programs typically pay less money than private insurers. Szczepański expresses concerns that financial instability attracts the interest of potentially predatory groups such as private equity firms.

New Mexico also topped the list for private equity risk in a report released earlier this year.

“This model is fundamentally inconsistent with a public good focus on health care,” said Chris Noble, policy director at the Private Equity Stakeholder Project, which published the report. He said that when private equity, in particular, gets involved in health care, leadership focuses on making a quick profit for investors rather than improving hospital operations.

They typically do this by reducing staff, even if staff are already struggling to keep up with patient needs. They will either lower prices or raise prices.

Noble said more state governments are paying attention to the impact it has on public health.

“There has been a significant increase in these regulations over the last few years,” he said.

Most states require notice of a transaction involving a health care organization, and many require state approval. New Mexico joins that group this year.

State Sen. Katy Duhigg and Rep. Reena Szczepański co-authored the Health Care Consolidation Oversight Act, which gives the state influence over hospital mergers and acquisitions.

Senator Duhigg said the lack of regulation in this area left him vulnerable.

“It was a moment of choice, which made it a very attractive area for these companies because they could basically do whatever they wanted,” she said.

The law states that management of organizations wishing to merge must notify the insurance inspector. It must also demonstrate that the transaction will not lead to adverse effects for patients, such as higher prices or reduced availability of services.

“It really is a monopoly issue,” Duhigg said. “It’s an antitrust issue, and we don’t have great antitrust laws here in New Mexico.”

The law only lasts until July 1, 2025. Duhigg said that’s because she and her colleagues are working on a more comprehensive law that includes more community input and ideas from other states, with the goal of making it through next year’s longer, two-month legislative session. She stated that the current law is not sufficient.

“It really has no teeth. There is no enforcement mechanism. There is no transparency,” she said.

But for now, Duhigg said it gives the state the ability to track transactions and where they might be harming state health care, something it didn’t have before.

This relationship is made possible thanks to the WK Kellogg Foundation and KUNM listeners.