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Women and their doctors in Sierra Vista, AZ, had no say when their only hospital joined a Catholic health system in 2010 and adopted religious restrictions on reproductive health care. Tubal ligations were banned and a woman suffering a miscarriage was sent 80 miles away to the nearest non-religious hospital for help ending her doomed pregnancy, the treatment necessary for her to avoid infection. It took over a year of community protests to convince the board of Sierra Vista Regional Health Center to end its ill-advised affiliation with the Carondelet Health Network.
Unfortunately, people in Arizona and many other states across the nation are being left unprotected as a wave of hospital consolidation is changing the health care landscape in their communities. Hospital mergers and acquisitions jumped from 66 in 2010 to 112 in 2015, an increased pace that is continuing in 2016. Regional and national health systems – like the Carondelet Network’s parent system, Ascension Health – are growing larger. The top 25 systems in the nation now control nearly one third of all acute care hospital beds in this country, giving them increased financial and political power. Many financially-struggling hospitals are either joining these large systems or closing – 60 rural hospitals have shut their doors since 2010. 
Who is watching out for the needs of health care consumers affected by all this hospital consolidation? A new national survey by MergerWatch concludes that state oversight of hospital consolidation is woefully inadequate to protect community access to needed health services. State Certificate of Need (CON) programs were enacted during an earlier era of hospital expansion, with the primary purpose of guarding against overbuilding, duplication of services and resulting excessive health care costs. Some states (such as Arizona) have abandoned CON review entirely, as part of a general trend toward de-regulation, leaving consumers unprotected from hospital “merger mania.” In most of the 35 states that still do have CON programs, the review guidelines and process have not been updated to address the current trend of hospital consolidation, downsizing and closing.
Learn more about how hospital consolidation is changing the health care landscape by joining a MergerWatch webinar on June 15 from 3 to 4:15 p.m. Eastern. You can register for this webinar here.
MergerWatch staff studied the elements of each state’s CON law and implementing regulations to determine its suitability for the current market condition of consolidation. The MergerWatch study found, for example, that only 10 states require CON review when a hospital is going to close or if a service would be discontinued. Hospitals routinely close or downsize as a result of transactions involving two or more hospitals. Sometimes one of the hospitals will be transformed into a different type of facility, such as a substance abuse treatment center. Or, as was the case in Sierra Vista, AZ, reproductive health services may be eliminated when a secular hospital joins a religiously-governed health system.
This study also found that:
- Only eight states require CON review when a proposed hospital transaction is structured as an affiliation or something other than a merger or acquisition, even though it could mean a new entity would be in control of the hospital.
- Just nine states require consumer representation on the CON reviewing body.
- Only four states mandate that the reviewing body consider written testimony from the public.
MergerWatch research gave each state’s program a grade, ranging from F for those states with no CON process up to A- or A for the six states with relatively strong (although still imperfect) hospital oversight policies. How did your state rate? You can check out the state grades and read the entire MergerWatch report on its survey findings, When Hospitals Merge: Updating State Oversight to Protect Access to Care.
What can state and local health advocates do to help ensure consumer voices are heard and community health needs considered when hospital transactions are proposed? MergerWatch staff have identified model CON policies that would allow for state oversight of a wider range of proposed hospital transactions, such as affiliations, and in circumstances when control of a hospital board is to be shifted to another entity, such as a health system. Review would be required for proposed hospital closings and when services would be discontinued at one or more of the partnering hospitals, including reproductive health services. CON review boards would be required to include consumers and consumer advocates, and have limits on the number of members who are hospital industry insiders.
Under these model policies, CON review would include an examination of community health needs, as documented in an existing or new needs assessment or state health planning document, and an assessment of how services meeting those needs would be affected by the proposed transaction. There would be much more transparency to the public about the review process and any transactions being reviewed, as well engagement of affected consumers through such mechanisms as public hearings and submission of written comments.
How can a robust CON program make a difference? Rhode Island’s CON program, one of the strongest in the nation, ensured that consumer voices were heard and community health needs considered as state officials reviewed a proposal to close the obstetrics unit at Memorial Hospital in Pawtucket, RI, which was acquired by the Care New England system in 2013. Care New England said it would send pregnant women to two of the system’s other nearby hospitals. The state Department of Health was required to issue a “reversal” of Certificate of Need and held three public hearings in the Pawtucket area, during which local women and midwives voiced concerns about loss of the hospital’s “mother-friendly” birthing center. Although the DOH ultimately approved the shut-down, citing the hospital’s “unsustainable” financial situation, it imposed several what it termed “patient-focused conditions.” For example, Care New England was required to submit a plan to “replicate Memorial Hospital’s unique alternative birthing experience” at another of the system’s hospitals and ensure low-income women would have transportation to this alternative location.
Learn more about model CON policies and some action steps advocates can take in their states by joining a MergerWatch webinar on June 15 from 3 to 4:15 p.m. Eastern. You can register for this webinar here.