By Julia Burleson and Stacey Pogue
Increased hospital consolidation and private equity in health care have raised widespread concerns about higher costs, reduced access, lower quality, and decreased competition. In New Mexico, a proposed merger between a local hospital system and a larger out-of-state system aimed to create a 48-hospital system with approximately $11 billion in annual revenue. Although the transaction fell through, it highlighted the state’s lack of oversight mechanisms for mergers and acquisitions and spurred legislative action.
In 2024, New Mexico enacted the Health Care Consolidation Oversight Act (SB 15) and strengthened the law in 2025 with HB 586, which extended and expanded its authority. While the 2025 legislation built on the foundation laid in 2024, it ultimately fell short of its initial ambitions after encountering strong opposition from the hospital industry and allied business and provider groups. However, the state’s recent efforts lay the groundwork for a robust and transparent oversight framework, which may become increasingly important as financial pressures from the federal One Big Beautiful Bill Act (H.R. 1) drive a potential new wave of mergers and acquisitions.
The Risk of Hospital Consolidation and Private Equity in New Mexico
New Mexico’s hospital sector is highly consolidated, with KFF rating all four of its metro areas as highly concentrated. In addition, private equity firms own 36% of New Mexico’s hospitals—the highest proportion of any state. At the time state legislators introduced SB 15 in 2024, New Mexico had no formal oversight process for hospital transactions, unlike most states.
In response, Representative Reena Szczepanski and Senator Katy Duhigg sponsored successful legislation in both 2024 and 2025 to authorize state review and approval of mergers and acquisitions involving hospitals. The legislators emphasized that the bills do not block investment, but aim to ensure the state evaluates major health care transactions for their potential impact on access, cost, and quality.
They argued that private equity firms, which have a fiduciary duty to prioritize shareholder profits, may make decisions that do not align with community health needs. The sponsors cited research linking private equity ownership to decreased quality of care, along with testimony from providers, patients, and advocates across the state about the impacts of hospital consolidation. Through listening sessions with stakeholders, Senator Duhigg and Superintendent of Insurance Alice Kane heard reports of reduced access to essential services such as labor and delivery services, following consolidations. The bill sponsors also pointed to hospital consolidation as a factor contributing to rising health care costs. In 2020, average spending on hospital care was $3,960 per person, higher than in neighboring states.
Temporary Hospital Consolidation Oversight Authority Enacted in 2024
New Mexico enacted the Health Care Consolidation Oversight Act (SB 15) in 2024, which temporarily authorized the Office of Superintendent of Insurance (OSI), in consultation with the state’s Health Care Authority, to review and approve or deny mergers, acquisitions, and other transactions that would result in a change in control of a hospital. OSI’s review considers the impact the proposed transaction will have on access to services, quality of care, patient affordability, and competition in the market. In addition, the law granted OSI authority to conduct post-transaction oversight for three years to monitor compliance with any conditions placed on approved transactions and other outcomes.
The sunset date in the law repealed authority a year later (as of July 1, 2025), giving bill sponsors time to gather stakeholder input and craft a more comprehensive and permanent approach for the 2025 legislative session.
Ups and Downs in the 2025 Session Yield Permanent and Expanded Authority
Following the passage of SB 15, OSI and bill sponsors conducted listening sessions around the state, and heard from consumer advocates, community members, insurers, health care providers, and hospital leaders. In the fall of 2024, bill sponsors outlined the more comprehensive approach they planned to take in the 2025 session, along with a timeline for taking stakeholder input on the draft legislative language prior to session.
Bill sponsors filed SB 14 in 2025, which sought to increase the transparency of proposed transactions and expand oversight to additional types of transactions and entities beyond hospitals, including other health care providers and private equity investors. SB 14 faced overwhelming industry pushback and was voted down in committee. Proponents scrambled to find another path to extended expiring state oversight authority in New Mexico’s short, 60-day session, ultimately amending and passing a substitute bill, HB 586. To pass the bill, sponsors scaled back several provisions, for example, making certain information on proposed transactions confidential in response to concerns from the state’s hospital association.
While HB 586 is pared down compared to SB 14, it expands on 2024’s SB 15 in several ways, including:
- Making the state’s oversight authority permanent;
- Expanding oversight to additional transactions, including acquisitions of independent health care practices by a health insurer or its affiliated companies and changes in control of the real estate a hospital sits on;
- Making some of the information in the notice of proposed transaction public, including the goals of the transactions and areas, services, and groups impacted, and allowing public comment on transactions under review;
- Allowing the state’s review to consider the transaction’s impact on employee salaries and working conditions;
- Shifting oversight authority from OSI to the Health Care Authority; and
- Establishing financial penalties and non-compliance and whistleblower protections for hospital employees or others who report improper acts.
Looking ahead
While proponents in both 2024 and 2025 aimed to establish more robust health care consolidation oversight modeled on Oregon’s authority, opposition from hospitals and industry groups forced compromises. Yet, New Mexico’s iterative process shows how sustained legislative engagement, stakeholder outreach, and a willingness to adapt can lead to meaningful policy development, even in the face of powerful opposition. By building a foundation for transparency, public accountability, and state-level approval authority, New Mexico is now better positioned to respond to the influence of hospital consolidation and private equity in health care.
New Mexico joins a growing number of states with hospital consolidation oversight authority that extends beyond notice and review to leverage approval authority and post-transaction monitoring. These oversight tools may become increasingly important to states if shifts in federal policy accelerate hospital consolidation, impacting local access to and affordability of health care.