Rhode Island: Legal and Regulatory Options for Addressing Health System Consolidation

States are increasingly facing difficult questions about how to respond to health care consolidation, particularly mergers of health care organizations. Evidence shows that increased consolidation reduces competition and can increase costs. In addition, states may want to prevent their local health care systems from merging with out-of-state organizations, which they are less able to regulate. This may be a particular concern if the local entity is non-profit — and subject to community benefit requirements — and the out-of-state entity is a for-profit; such a merger could lead to fewer population health investments and less local accountability.

Consistent with the Milbank Memorial Fund’s mission to provide policymakers with the best evidence and experience, we offer technical assistance to state officials as they navigate these complex issues. To that end, we recently commissioned Jaime King of the University of Auckland, Robert Berenson of the Urban Institute, Robert Murray of Global Health Payment, and Katherine Gudiksen of The Source on Healthcare Price and Competition to provide state officials in Rhode Island with an in-depth legal and policy analysis of health system consolidation in their state and the impact of a potential merger between the health systems Lifespan and Care New England.

A recent presentation by these researchers offers an overview of the state and local markets, factors that the Federal Trade Commission (FTC) considers when analyzing proposed mergers, and the state’s policy options. The policy options include two paths: the first involves cooperating with the FTC, and the second involves acting independently by challenging the merger or establishing a certificate of public advantage (COPA). We are pleased to share these resources with other states that may be facing similar circumstances.

Read the presentation