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A Lake Oswego lawmaker wants the country's most sweeping health care merger oversight. Hospitals say it goes too far.

GARY ALLEN - Providence Health's growth in Oregon could be curbed under a new bill. Shown is the Newberg Medical Center, which roughly doubled the size of the facility it replaced in 2006.Lawmakers are considering a bill that would give Oregon the most sweeping state oversight of health care mergers in the country.

But while supporters say House Bill 2362 would counter increased costs and curbs on care, opponents say it goes too far.

The system contemplated by chief sponsor Rep. Andrea Salinas, D-Lake Oswego, is drawing support from pro-abortion and death-with-dignity groups as a response to one slice of the merger trend: the rapid growth of health care entities affiliated with the Catholic Church, which restrict care for women and transgender people.

"I think it's really important to look at their history of actions, like their actions with me," said J. Kallaway, a former Portland resident and longtime LGBTQ organizer who supports the bill based on a denial of care they received from Providence Health & Services. "I worry about Providence buying up other hospitals without any supervision, what that might mean for other people."

The bill empowers the Oregon Health Authority to approve, deny or modify proposed mergers or contracts that increase a health care entity's patient revenue by $10 million or more, using criteria that include basic social issues of equity and access to care.

Legislative observers say it is expected to pass.

"This is not a bill to stop these transactions. It's a bill to do these transactions better," Salinas told the Portland Tribune. "It's to make sure that patients aren't hurting at the end of these transactions, and hurting more severely in terms of their pocketbook and their access to care."

Opponents, however, decry the bill as intrusive overreach that could obstruct collaborations between companies and endanger struggling rural hospitals.

Michael Cox, a vice-president at the Oregon Association of Hospitals and Health Systems, said the legislation as written is a "disaster," adding "Rural clinics could be shuttered, hospital operations could grind to a halt, and patients could bear the costs of a massive new regulatory structure."PMG PHOTO: JONATHAN HOUSE - Democratic Rep. Andrea Salinas of Lake Oswego wants Oregon to watchdog health care mergers and protect access to services.

Religious concerns drive bill

The group NARAL Pro-Choice Oregon and Compassion and Choices Action Network support the bill, citing the rapid growth of Catholic-affiliated health care.

A report issued by the group Community Catalyst last year found that as much as 40% of hospital acute care beds in Oregon are in Catholic facilities.

The largest Catholic system in Oregon is Providence Health & Services. Founded by the order of the Sisters of Providence in Washington state, the health system now operates dozens of hospitals spread among eight states. It's absorbed many private practices and has gone into the insurance business as well.

The Service Employees International, which supports the bill, cited a Health Affairs article finding that, as of 2018, Providence employed "the largest share of physicians in Portland (28.7%) and nearly tripled its market share over (a) two-year period."

Kallaway, who uses the non-binary pronouns they and them, said that's a problem, given their experience seeking trans services from the system. In 2015, Kallaway applied for surgery, but Providence demanded they undergo a year of testosterone treatment — a step that would be offensive, harmful and contrary to Kallaway's non-binary identity.

Eventually, they gathered the courage to appeal Providence's denial, but the experience was drawn-out, traumatic and enraging, Kallaway said: "It was like a punch in the gut, emotionally and mentally for me."COURTESY OF J. KALLAWAY - Citing a stressful denial of care several years ago, J. Kallaway is supporting a bill that could restrict the growth of Catholic health care.

Providence has sparked other criticisms over the years for its restrictions on care required by the Catholic Church.

• In 2012, after Providence merged with Swedish Health Services, the Swedish hospital in Seattle stopped offering elective abortions.

• Later that year, Providence halted distribution of a services guide distributed by Multnomah County and the Street Roots newspaper, citing its listing for Planned Parenthood.

• In 2017 Providence successfully lobbied for an exemption to Oregon's Reproductive Health Equity Act.

• Two years ago, Providence dropped its planned acquisition of the nonprofit CareOregon, which serves low-income people under the Oregon Health Plan, after critics raised concerns.

• In California, the ACLU sued Providence in 2017 and 2019 for denying surgeries to transgender people. In court, Providence said it didn't need to offer those surgeries, citing its "First Amendment Rights of Free Exercise of Religion and Free Expression."

•This year, the California Attorney General opened an investigation of Providence over physicians complaints that the system's religious principles were obstructing provision of contraceptive services and miscarriage treatment.

A Providence Health spokesman, Gary Walker, called the argument that access to care suffers due to mergers a "false narrative," but suggested that people in need of reproductive and transgender services may need to go to providers other than Providence hospitals for services the Catholic system won't provide.

"Oregon law protects access to these services and mandates that health insurers have an adequate network to provide these services in Oregon," he said in an email. "Like many faith-based and secular hospitals, Providence does not offer every service or procedure that a patient may seek ... some services are not provided in accordance with the Ethical and Religious Directives for Catholic Health Care Services."COURTESY PHOTO - Providence Health & Services, governed by Catholic directives, controls a major portion of Oregon's health care system.

But Salinas, the Lake Oswego legislator, said fellow lawmakers have told her that in some parts of Oregon, their female constituents can't even get a pap smear without driving for hours to a different provider.

"I really started to hear from advocates (saying) we need to do something before this starts to get worse," she said.

Prices go up despite efficiency claims

Oregon health care advocates used to brag about Oregon's lower-than-average health care costs, but over the years that talking point has disappeared.

In 2006, Oregon's per-capital health expenditures were 15th lowest in the country. By 2014, however, they'd climbed to about average, according to federal data cited in legislative testimony two years ago.

The cost increases came despite a wave of consolidations and mergers that were supposed to increase efficiency both in the state and nationwide.

In 2019, concern over costs sparked Oregon lawmakers to pass a measure intended to rein in health care cost growth using transparency and frequent reporting, much as Massachusetts does.

Now, Salinas wants Oregon to follow Massachusetts in another regard. In response to price hikes linked to health care mergers, that state requires extra review, requiring health officials to study mergers and to submit their findings to the state attorney general.

Salinas' bill goes even further, by giving state health officials unilateral authority to determine whether hospital and other health care mergers could go forward at all.

Robert Berenson, a public health professor and former White House adviser and federal Medicare official, said the proposal sounds "stronger and different" than what any other state does to regulate mergers. Based on research he published for the nonprofit Urban Institute, where he is a senior fellow, Berenson suggested the change would move Oregon in the right direction.

"The leading cause of health care cost increases right now is hospital prices," he said.

However, he said the bill should require the attorney general be more involved, like in an "advisory" capacity to the health authority.

Opponents of the bill, including a variety of independent clinics, say the fine print of the bill could interfere with collaborations that improve patient care, as well as basic contracting for even non-health-related services.

Some also say it would benefit unions backing the bill by giving health care workers new leverage in collective bargaining.

Salinas called the latter criticism is disingenuous and insulting, including to the unions that represent front-line health workers watching patients struggle to afford health care — just as many health care workers do, as well.

"They're doing it, I think, for the right reasons," she said.

The House Health Care Committee held a hearing and recommended passage, before referring it to the Joint Ways and Means Committee. The bill has not yet been scheduled for a hearing there.

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