Oregon’s Bold Healthcare Merger Law Fails to Block a Single Deal in Five Years

Dana Gibbon was 18 weeks pregnant with her first child when her OB-GYN informed her at a routine appointment that they would no longer be her doctor. The Corvallis Clinic, a practice serving the 60,000 residents of Oregon’s Willamette Valley, was shutting down its OB-GYN services. All of the clinic’s obstetricians and gynecologists had resigned, leaving patients scrambling for alternatives.

The clinic sent a letter to patients, stating:

"We have appreciated the opportunity to participate in your care and apologize for any inconvenience this may cause."

This closure occurred two years after Optum Oregon, a subsidiary of UnitedHealth Group—the nation’s largest health insurance company—acquired the Corvallis Clinic. Optum Oregon attributed the shutdown to a national physician shortage, which made it difficult to replace departing doctors and increased the workload for those who remained.

Gibbon frantically searched for a new OB-GYN. Friends recommended two other obstetrics practices in the area, but both had also closed. She ultimately settled on a small hospital near her home, which had only four dedicated maternity beds—all of which were full when she was due to deliver in April. Her induction was delayed three times before her healthy baby boy was born via cesarean section on April 29. Gibbon later reflected, saying:

"It’s impossible not to wonder if things may have gone differently if there had been more labor and delivery beds in the area."

Oregon’s Law: A Bold Attempt to Curb Healthcare Consolidation

In 2021, Oregon became the first state in the U.S. to grant its health department sweeping authority to block acquisitions and mergers involving hospitals, hospices, and medical practices. The law was designed to counteract the growing consolidation in the healthcare industry, which research shows reduces competition and drives up costs for patients.

State regulators were given the power to reject transactions outright, impose conditions on deals, or levy fines if companies violated the law. The legislation was widely praised as a national model for protecting healthcare access and affordability. Lawmakers and advocates argued that Oregon’s oversight would prevent multibillion-dollar deals from reducing care quality and increasing costs for consumers.

Five Years Later: No Blocked Deals, No Fines

Five years after the law’s implementation, Oregon has not formally blocked a single healthcare transaction or issued any fines. While the law has been credited with leading two high-profile deals to withdraw—including a merger of two Portland-area hospital systems and the acquisition of a nonprofit providing Medicaid benefits to 500,000 Oregonians—critics say it has underperformed expectations.

Dr. John Santa, a retired physician and former member of the Oregon Health Policy Board, which oversees the state agency responsible for enforcing the law, expressed deep disappointment. He stated:

"I never imagined it would perform as poorly as it has."

An investigation by ProPublica reviewed state records and found that of the nine healthcare deals subjected to follow-up reviews under the new law, at least three resulted in outcomes the legislation was designed to prevent. For example, UnitedHealth Group completed its acquisition of LHC Group, a home health provider, for $5.4 billion—a deal that proceeded without intervention from state regulators.

Critics Question the Law’s Effectiveness

Advocates who supported the law argue that its lack of enforcement has left patients vulnerable to the very consolidation it was meant to curb. The closure of the Corvallis Clinic and the challenges faced by Dana Gibbon highlight the real-world consequences of unchecked healthcare consolidation, even in a state with strong regulatory tools.

As Oregon’s unique law enters its sixth year, questions remain about why it has yet to block a single deal or issue penalties, despite its ambitious goals. The state’s health department has not provided detailed public explanations for the lack of enforcement, leaving patients, providers, and policymakers to question the law’s impact.