Oregon’s Healthcare Merger Law Has Not Blocked a Single Deal in Five Years

Five years after Oregon enacted a landmark law granting the state health department authority to block healthcare mergers, the Oregon Health Authority has not formally blocked a single transaction or issued any fines. While the oversight program has led to the withdrawal of two high-profile deals and imposed conditions on 15 of the 65 transactions reviewed, a ProPublica examination of state records indicates the law has failed to prevent service reductions and patient disruptions in several significant cases.

The legislation, enacted in 2021, was designed to counteract industry consolidation by allowing regulators to reject acquisitions or levy fines if companies disregarded conditions. However, the state has not blocked any of the 65 transactions evaluated. Instead, regulators have required continued service for Medicare patients, mandated the maintenance of reproductive healthcare access, and ordered detailed annual reporting. The process did lead to the cancellation of a proposed merger between Oregon Health & Science University and Legacy Health, as well as a deal involving CareOregon, following public outcry.

Critics argue the law has been ineffective in curbing the negative impacts of acquisitions by major entities such as UnitedHealth Group and Amazon. ProPublica found that at least three of the nine deals subject to follow-up reviews resulted in outcomes the law was intended to prevent. These include the closure of a rural hospice agency in Central Oregon following UnitedHealth Group’s acquisition of LHC Group, and the shutdown of a downtown Portland practice after Amazon purchased One Medical, which coincided with a drop in patient satisfaction scores.

The limitations of the review process were most evident in the case of the Corvallis Clinic, an independent practice acquired by Optum Oregon. Following financial distress exacerbated by a ransomware attack on Change Healthcare, the clinic was granted an emergency exemption from the state’s review process in just five days. This was the only exemption granted under the program. Since the sale, patients have reported significant disruptions, including delayed procedures, longer wait times, and the departure of multiple doctors, including several gastroenterologists who withdrew from on-call pools.

Health economist Larry Kirsch described the state’s review process as superficial and inconclusive, noting that regulators typically utilise the fastest 30-day review window allowed by law. Despite the criticism, Oregon Health Authority officials maintain that the program operates within its statutory limits and serves as a national model. Five other states, including Maine and New Mexico, have recently adopted similar oversight laws, though Oregon remains the first to implement such broad powers.