Minnesota's new health system merger law: Key questions, answered

More major health care mergers are on Minnesota’s horizon, as Duluth-based St. Luke’s and Wisconsin’s Aspirus Health this week announced plans to become one health care system.

If successful, the combined entity would include 19 hospitals, 130 outpatient facilities and 14,000 workers in Minnesota and Wisconsin.

This newest plan follows potential mergers unveiled by Duluth’s Essentia Health and Wisconsin’s Marshfield Clinic Health System, as well as South Dakota-based Sanford Health with Fairview.

A new Minnesota law bans anti-competitive health care mergers, but how this will work remains to be seen.

The bill’s author, DFL Rep. Robert Bierman of Apple Valley, joined Morning Edition host Cathy Wurzer on Thursday to talk about regulation and the evolving future of health care in Minnesota.

Bierman says one of the Legislature’s biggest concerns is larger mergers historically raising health care costs for consumers.

“I think that's the most important thing to keep in mind here is the public interest — in making sure that our infrastructure meets the needs of the people in this state, border to border.”

The following is a transcript of the conversation, lightly edited for clarity. Listen to the full conversation using the audio player above.

What was the thinking behind the need for this bill?

We're seeing, across the country, medical mergers and acquisitions that are accelerating and Minnesota is no different. And so the thought was, we need as a state to make sure that mergers and their effects can be mitigated on the health care input impacts to Minnesotans.

The legislation prohibits health care transactions that substantially lessen competition or tend to create a monopoly — how will this be measured?

There are a number of different parts of the bill that look at a particular merger and measure things like access, affordability, quality of care and the range of services that are historically provided. So there's a lot of metrics in it. But the fundamental [question] is: Will it reduce health care to people in Minnesota? And we have certain areas where mergers and acquisitions have caused some clinics to close and people have to drive farther to get to their health appointments, both in rural and in urban areas.

So, the other part of this is about measuring and looking at access, and quality of care and making sure that that doesn't drop. And, of course, the unsustainable rates of health care costs that we're seeing mergers have an impact on that as well. So the costs, the high costs of health care are many, and consolidation and mergers are just one of the many things we have to look at, to try to control that unsustainable growth of health care costs.

What about timelines — who determines whether a deal is in the public interest, if it harms public health or has a negative impact on the health care market?

Previously, what we were seeing was that health care mergers, they just happened. It was a business entity, a business decision. We are now at an intersection where corporate health services — which underpin our delivery model — meet public health requirements. And so we in the Legislature believe that health care should be a public interest. And so we put this into statute.

This will be guided by a notice review and approval process around the Minnesota Department of Health. And then the attorney general would also be able to review these mergers when they reach a certain level. And then look at those aspects in the bill.

The bill is about mergers, but it also is about public interest… which is central and the focal point of the bill.

Do you think this law could doom pending health care merger deals, like that between Sanford and Fairview?

While related, the bill is a bigger scope than just that deal. And I really can't comment on what will transpire with that or prognosticate of what will become of it. I know consultations are going on over there. And I think there's great optimism, from health care entities from all of these deals, who are really optimistic about what their merger will do for health care.

I think that our concern comes from the fact that mergers of this size — if you look at them across the country — they do have this impact on first and foremost, the price for consumers. Raising prices with medical mergers is commonplace.

I think we have a good arrangement with the Minnesota Department of Health to gather the data that they need to make some of these decisions with the attorney general. But we also gather this data for legislators to understand the health care market.

I think that's the most important thing to keep in mind here is the public interest — in making sure that our infrastructure meets the needs of the people in this state, border to border.

It sounds as though this law could pump the brakes on mergers, not necessarily halt them. Will the bill allow the attorney general's office to take a merger to court to stop it?

It will if the attorney general feels that it is not in the public interest. He would make that argument, and it would be up to the court to decide.

Could there be a special session to address these mergers?

Certainly, I've heard that as well. The governor even mentioned it a while back that special sessions are called when special sessions are needed. And we just have to wait and see what transpires with these mergers going forward. And if we get called in for this, we'll go and we'll deal with it.

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