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Panel hears concerns that proposed rural‑hospital collaboration law could open antitrust loopholes
Summary
House Bill 1393, a hearing-only bill, would let rural hospital authorities collaborate on purchasing, staffing and contracting and extend antitrust protections in some rural transactions; stakeholders warned the bill's current language could allow larger systems to exploit exemptions and raise consumer prices.
Representative Werkhauser presented House Bill 1393 as a measure to help rural hospitals combine purchasing, staffing and negotiation functions to achieve economies of scale. "If three hospitals 15 miles apart could come up with a contract where they rotate, then that'd be great," the author said, noting supply savings and shared staffing as goals.
Hospital CEOs and rural leaders described tight margins and workforce shortages. Bill Lee, CEO of Evans Memorial Hospital, told the committee that combining services could increase bargaining parity with insurers and help maintain local services: "Rural hospitals have many challenges...If you could combine share leadership across the board...you could work together, share resources, share physicians," Lee said.
But multiple witnesses and stakeholders warned the bill's drafting could be broader than intended. Josh Belinfante (speaker 17) warned the bill "opens the door" to larger systems affiliating with rural authorities and said several provisions read as broad encouragement for mergers, acquisitions and consolidations. Jesse Wetherington (speaker 20) and Whitney Griggs (speaker 21) said the language could allow health systems to capture rural markets and drive up prices; Griggs pointed to a recent FTC intervention in a similar effort in another state and urged state oversight.
Belinfante and others recommended narrowing the statutory triggering conditions so the immunity applies only to narrowly defined rural public hospital authorities and not to larger systems that could affiliate. The committee heard technical and legal questions about the interplay with existing certificate‑of‑need laws and state action immunity in antitrust litigation. Representative Werkhauser said he welcomed suggestions and that he wanted to protect local hospitals while preventing unintended consequences. The item was a hearing only; no committee vote was taken.
