- The CMS on Tuesday released data for the first time on hospital and nursing home mergers, acquisitions and changes of ownership since 2016 for facilities enrolled in Medicare.
- Nearly 350 changes in ownership among hospitals and more than 3,000 among skilled nursing facilities took place between 2016 and 2021, with significant variations across states, according to a related analysis of the data from the Office of the Assistant Secretary for Planning and Evaluation.
- Changes in ownership were more common among medium and large hospitals than for small hospitals. They were also more common for hospitals with negative profit margins, compared to more profitable hospitals, according to the analysis.
The Biden Administration is pushing to rein in healthcare consolidation, and prodded the Department of Justice and the Federal Trade Commission "to enforce the antitrust laws vigorously" last summer, while calling out the healthcare industry specifically.
Antitrust regulators are now looking to modernize merger guidelines, which have not been updated in more than a decade, in an effort to crack down on deals with the potential to lessen competition and increase costs for patients.
Alongside the HHS data out Tuesday, the ASPE also released a related report, analyzing changes of ownership over the past six years.
It found changes in ownership over the past six years have been much more common in nursing homes than hospitals, with wide variations in ownership by state.
For example, 14 out of 73, or 19% of South Carolina's hospitals, were sold during the period. Meanwhile, most states had less than 4% of hospitals change ownership.
They also found the vast majority of purchased hospitals, 85%, have a single direct organizational owner. About 6% have multiple organizational owners, though no individual owners with at least 5% interest.
Ultimately, less than 10% of hospitals are purchased by individual owners.
The agency expects to release updated data on a quarterly basis to enhance transparency for patients, as well as for policymakers and the communities where the facilities are located, according to the release.
"Hospital and nursing facility consolidation leaves many underserved areas with inadequate or more expensive health care options," CMS Administrator Chiquita Brooks-LaSure said in the release.
"This new data gives researchers, state and federal enforcement agencies, and the public new opportunities to examine how mergers, acquisitions, consolidations, and changes of ownership impact access to care, care quality, and prices as a way to enable greater transparency and insight into the hospital and nursing home industries," Brooks-LaSure said.
This year the FTC has already successfully challenged two separate hospital mergers in New Jersey and Rhode Island.
In Rhode Island, the state's two largest health systems, Lifespan and Care New England, abandoned plans to merge in February after a legal challenge was brought by the FTC and the state's attorney general.
The agency also challenged a deal between Hackensack Meridian Health, New Jersey's largest health system, and Englewood Hospital, one of the last independent hospitals in the area. That deal was blocked by a federal appeals court in March, affirming a lower court ruling.
Deal-making between hospitals also fell to a record low in Q1 of this year, according to a report from Kaufman Hall, though researchers called the results an "interesting anomaly" and said in the report they expect activity to pick back up in the space.