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Board weighs risks and safeguards as consolidation reshapes primary care market
Summary
Staff and stakeholders told the COST Board that consolidation—hospital and private-equity ownership of primary care—can drive higher prices and site-of-care shifts but also offers potential benefits; members discussed transaction-review laws, better ownership transparency, purchasing alignment and guardrails to ensure investments strengthen frontline care.
Staff briefed the COST Board on primary-care consolidation trends, risks and policy options, urging more proactive state oversight and better data on ownership and flows of funds.
Rochelle Bogue summarized stakeholder input: consolidation can bring investment and scale but often correlates with higher prices and shifts of services into higher-cost hospital settings. "Research consistently shows that consolidation is associated with higher prices," she said, and noted examples where retail entrants expanded rapidly and later retrenched, causing instability in local access.
Board members discussed tools used by other states, including transaction-review laws that allow pre-transaction examination and conditions (Oregon was cited as an example), primary-care spend targets, and cost-growth benchmarks. Members urged combining regulatory safeguards with purchasing strategies: aligning Medicaid, public-employee and commercial purchasing to reduce administrative complexity for practices and to create incentives that keep funds flowing to frontline care.
Staff recommended building state capacity for ongoing monitoring (not just one-time transaction reviews), improving ownership transparency, and analyzing price variation by ownership type. The board directed staff to prepare more detailed market-oversight options for its July meeting as it moves toward year-end recommendations.
