Board launches market-oversight review, flags private-equity and consolidation impacts

Board staff opened a multi-month market-oversight review, emphasizing that consolidation and private-equity activity are associated in the literature with higher prices and that Washington lacks consistent ownership transparency.

Jane Beyer of the Office of the Insurance Commissioner summarized state research and a PitchBook review showing substantial private-equity activity in specialties including dental, musculoskeletal, vision, gastroenterology, dermatology and specialty pharmacy. Beyer said, "From 2020 to 2024, there were anywhere between 74 and 111 PE deals in Washington state per year," and noted cumulative annual deal values she cited in the report.

Staff summarized national studies linking hospital horizontal consolidation to price increases of roughly 20—60% and noted that vertical integration (hospitals acquiring physician practices) is associated with physician price increases in the low-to-mid teens within two years of acquisition. Staff also cited studies showing mixed or absent quality gains and flagged workforce impacts linked to private-equity ownership (higher turnover and reduced staffing in some settings).

Given those findings, staff presented a policy toolbox that includes stronger ownership-transparency requirements (a provider registry), expansion of the state's material-change notice to more facility and entity types, expanded review criteria that would require applicants to demonstrate how transactions will contain costs, preserve access and maintain quality, and consideration of site-neutral payment and facility-fee limits.

The board asked detailed questions about scope (which entities vs. which facility types), post-transaction monitoring and the resources required for ongoing compliance work. Staff said it will bring the draft stakeholder questions to the stakeholder advisory committee in February and will highlight strategies used in California and Oregon at the March meeting.