This story is republished from NM Political Report, a nonprofit news outlet, as a part of our commitment to bringing you the best in independent news coverage that matters to Albuquerque.
By Susan Morée
A bill that would provide state oversight of private equity firm purchases of hospitals passed its first committee along party lines, without a recommendation.
SB 14, the Healthcare Consolidation and Transparency Act, sponsored by Sen. Katy Duhigg, D-Albuquerque, would create a review process triggered by the purchase of a hospital. Duhigg narrowed the scope of the bill before it came to the Senate Health and Public Affairs Committee to include only hospitals or healthcare organizations purchased by an insurance company. It would exclude individual practices.
The bill would mandate that, after the review process, the purchased hospitals provide annual reports, which would enable the state to recognize if services have been cut or prices raised. The bill also contains whistleblower protections so workers could come forward if they see services negatively impacted.
At least one Democrat, Sen. Martin Hickey, D-Albuquerque, who is a former hospital administrator and a medical doctor, did not like the bill. He argued that any entity who owns a hospital can be profit motivated and he made a motion to pass the bill with a “no recommendation”.
Hickey’s motion came after Republican Sen. Larry Scott, of Hobbs, tried to table the bill, but that effort failed along party lines.
Hickey argued that the bill needs work and he encouraged Duhigg to spend another year fine tuning it. Duhigg and New Mexico Superintendent of Insurance Alice Kane spent a year holding stakeholder meetings around New Mexico to receive input on the bill. Hickey said that was not enough.
He said he fears the bill would discourage investment in New Mexico hospitals and in turn would cause struggling rural hospitals to close. He wanted Duhigg and Kane to listen to experts in investment to find out if investors would still find the state attractive to purchase medical facilities if the bill is enacted. He said he hopes this could be worked out before the bill is heard in the Senate Judiciary Committee.
Duhigg argued rural hospitals would not close. She said the bill contains an emergency clause that if a facility is on the brink of shutting down, it would receive an exemption for review.
Duhigg added that the “band-aid” bill, SB 15, which the state enacted last year but carries no enforcement mechanisms, did not deter investment in New Mexico medical facilities. With 38% of hospitals owned by private equity, New Mexico is one of the largest in the U.S. for private equity investment in medical facilities.
Duhigg also talked about how private equity firms tend to buy hospitals, cut services, raise prices, load the hospital with debt, then sell it to another private equity firm. She said labor and delivery services have been especially impacted by this business model.
“It’s a terrible deal for New Mexicans and our hospitals,” she said.
Republicans argued against the bill, saying the information the state’s insurance office would gather would not be protected from the federal Freedom of Information Act and much of that information is proprietary.
Sen. Jay Block, R-Rio Rancho, said he would not support the bill because the medical system in New Mexico, with its significant nurse and doctor shortages, is “a mess” and he didn’t think the bill will help that problem. He also objected to the bill because the New Mexico Hospital Association is in opposition. The association is concerned that the bill could deter investment and that information gathered by the state could become available to the public.
Sen. David Gallegos, R-Eunice, said he was “very impressed” by Hickey’s arguments but he could not vote to pass the bill with a no recommendation.
“I regretfully stand in opposition to make someone else repair a bill. I find fault in that,” he said.
The bill heads to the Senate Judiciary Committee next.