A Massachusetts legislative committee held hearings last week on measures to regulate the purchase of hospitals and HMOs by for-profit companies.
The House Health Care Committee said the proposed legislation was born out of a previous hearing in November 1995 in which testimony raised concerns that free-care levels and access to healthcare services could diminish in the face of shareholder profit priorities.
Two bills under consideration impose restrictions on the latitude of for-profit companies to strike deals and make operating decisions. A third bill would impose a ban on for-profit ownership, a committee aide said.
The debate was triggered by a proposed joint venture between Columbia/HCA Healthcare Corp. and a two-hospital medical center in suburban Boston. The venture, introducing the first for-profit management of an acute-care hospital in Massachusetts, was approved by the state attorney general's office last week (See related story, this page).
"The goal of efficient healthcare delivery at a lower cost is necessary," said state Sen. Mark Montigny (D-New Bedford), chief Senate sponsor of one of the regulatory measures. "However, compromise of care in the process of maximizing profits is unacceptable."
The regulatory bills, which are almost identical, would require a for-profit applicant to agree to maintain or increase the level of free care provided by the predecessor not-for-profit hospital in the three years before the transaction.
The purchaser would have to pay for an independent "healthcare access monitor" hired by the state Department of Public Health to monitor and report publicly for three years on community healthcare access, including the level of free care provided.
Those provisions are among the state-negotiated additions to the contract governing the venture between Columbia and MetroWest Medical Center, based in Framingham, Mass., and Natick, Mass.
The bill also would require not-for-profit hospitals and HMOs to give the attorney general 90 days notice before transferring a substantial amount of assets to a for-profit entity. The for-profit purchaser would have to pay the costs of the attorney general's review.
Once a for-profit company assumes ownership, it would have to give the public health department 90 days' notice before closing a hospital or discontinuing a state-defined "essential service." The hospital would have to submit a plan assuring that the discontinued services are available elsewhere in the community.
Of the 17 people who testified before the committee, four opposed the proposed regulation, including representatives of the Massachusetts Hospital Association and the Massachusetts Association of HMOs, the House Health Care Committee aide said.
The other two opponents were legislators from Worcester, where Fallon Healthcare System is planning to sell St. Vincent Hospital and an equity interest in its 300-physician Fallon Clinic to OrNda HealthCorp, a Nashville, Tenn.-based hospital company.