A Unique Oregon Law Allows It to Block Healthcare Deals. In Five Years, the State Hasn’t Done So Once.

OB-GYN services were ending at the clinic in Corvallis, a college town of 60,000 in Oregon’s Willamette Valley. The doctor said all of the Corvallis Clinic’s OB-GYNs were resigning. 

The closure of the Corvallis OB-GYN practice came two years after a subsidiary of UnitedHealth Group, the country’s largest health insurance company, bought the clinic. The subsidiary, Optum Oregon, cited a national shortage of physicians that made it hard to replace doctors who left and increased the workload for those who remained.

Gibbon frantically looked for another doctor. Friends recommended two other obstetrics practices, but both had closed. Gibbon settled on a small hospital close to home with four dedicated maternity beds — all of which were full when she was due to deliver in April, delaying her induction three times. Her healthy baby boy was eventually born on April 29 by cesarean section, a procedure she’d hoped to avoid.

Corvallis patients like Gibbon faced this disruption despite a unique Oregon law intended to prevent it.

In 2021, the state became the first in the country to give its state health department the broad power to block acquisitions and mergers of hospitals, hospices and medical practices, an effort to counteract the consolidation that research shows is cutting competition and driving up costs nationwide.

Lawmakers said Oregon’s novel oversight power would stop multibillion-dollar deals from reducing care and increasing costs. State regulators got the authority to reject transactions or to add conditions and levy fines if companies disregarded them. The law was hailed as a national model.

Five years later, Oregon has not formally blocked a single transaction or issued any fines. While the new oversight is credited with leading to the withdrawal of two high-profile transactions — a merger of two Portland-area hospital systems and the acquisition of a nonprofit that provides Medicaid benefits to half a million Oregonians — some people who supported the law say it has not been nearly as effective as hoped.

Dr. John Santa, a retired physician and former member of the Oregon Health Policy Board, which oversees the state agency responsible for implementing the new law, said his interactions with the program were “so disappointing and fell so short of what I expected. I never imagined it would perform as poorly as it has.”

Of the nine healthcare deals for which regulators have done follow-up reviews, at least three had outcomes the law was meant to forestall, ProPublica’s examination of state records found. 

UnitedHealth Group acquired a home health provider, LHC Group, for $5.4 billion in 2023. It shuttered a rural hospice agency in Central Oregon two months later, funneling staff and patients to a location nearly 30 miles away. The state later said the move raised concerns about a potential reduction in access. A UnitedHealth spokesperson said the closure did not reduce services because patients and staff were reassigned and it continued to serve the same areas.

After Amazon bought One Medical for $3.9 billion that same year, it closed the group’s downtown Portland practice while cutting $100 million in operating expenses nationwide. It saw a drop in Oregon patient satisfaction scores, as measured by an outside group, a state review noted. Amazon declined to comment on the One Medical deal.

Oregon in 2022 approved the acquisition of a hospice provider by a private equity firm, Clayton, Dubilier & Rice. The firm told regulators that it wouldn’t change locations or staffing. Oregon took the company at its word — then watched it close a Salem hospice after the deal closed. 

In a follow-up report, the state noted the closure and alluded to “some changes” in Oregon staffing; it would not disclose whether this referred to adding employees or cutting them, saying the companies involved had designated the information confidential.

A spokesperson for Clayton, Dubilier & Rice didn’t address the closure but said in a statement that its hospice acquisition was “premised on the company delivering high-quality care.” The firm’s hospice providers in 2024 and 2025 received higher ratings than any other national provider in standardized consumer surveys, the spokesperson said, and the company improved its ratio of nurses to patients by 5.5% over its ownership period.

Clare Pierce-Wrobel, the health policy and analytics director for Oregon’s health department, the Oregon Health Authority, acknowledged that the state held some mergers to a lower standard while the program was just getting started. 

Dr. Nicole Kruppa had a thriving OB-GYN practice at the Corvallis Clinic before it was taken over by Optum. She told ProPublica that she quit after the sale because her workload grew unsustainable. She said burnout became so intense that she worried she would either make a medical mistake or get in a late-night car accident while driving to deliver a baby.

Optum didn’t fill vacancies when medical staff went out on planned leave, she said. Annual medical exams had to be postponed so the remaining OB-GYN staff could attend to emergencies, she said. 

A UnitedHealth spokesperson, Tyler Mason, said Optum helped keep the Corvallis Clinic’s doors open. “Our focus has been stabilizing practices, expanding access, and strengthening clinical services to preserve local care, maintain critical services and ensure patients can continue receiving the care they depend on close to home,” Mason said.

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When Oregon lawmakers created the merger and acquisition oversight program in 2021, they said they weren’t trying to stop every healthcare deal — just to ensure that those transactions made sense.

Consolidation in the healthcare industry is rife. About 50% of the country’s doctors were employed by a hospital system in 2024, research has shown, up from less than 30% in 2012. As competition narrows, studies show, prices can increase, the quality of care can decline and treatment can be harder to access, especially in rural areas.

Following Oregon’s example, five states last year approved laws that expanded their authorities over healthcare consolidation. One of them, Maine, adopted a bill this April that requires state review and approval of the sale of healthcare facilities when private equity firms are involved. New Mexico in 2024 also adopted a bill similar to Oregon’s.

Pierce-Wrobel, the health authority official, said Oregon is clearly a national leader. “People in Oregon are lucky to have a program like this in place,” she said. 

“The ability to actually see how these decisions are made and how it’s actually impacting your healthcare before it happens is novel and addresses a real, pressing issue,” she said, “which is affordability in healthcare, which impacts all of us.”

Although Oregon hasn’t blocked any of the 65 transactions it has evaluated, it has imposed conditions on 15. It has required doctors to continue serving patients covered by Medicare, the federal insurance program for seniors and the disabled. It has required reproductive and gender-affirming healthcare to continue and ordered detailed annual reporting.

The state also has required a deeper six-month review in seven cases, three of which are still underway. The other four deals were withdrawn, notably: the proposed merger of Oregon Health & Science University and Legacy Health, two major Portland-area hospital systems; and a proposed merger involving CareOregon, which administers Medicaid plans for more than 500,000 low-income people. Facing a public outcry, the healthcare organizations canceled their deals.

Dr. Jane Zhu, a primary care physician and associate professor of medicine at Oregon Health & Science University who studies healthcare access, said programs like Oregon’s add sorely needed transparency to medical dealmaking. 

But they “don’t necessarily change the equation” when it comes to the trend toward consolidation, she said in an email. Especially in rural areas, the fact remains that “regulators can approve the merger and prices go up and consolidation worsens, or they can block a merger and maybe there’s an immediate effect on the clinic’s solvency or sustainability.”

According to Larry Kirsch, a health economist, one problem is that Oregon regulators have typically chosen the fastest option for reviewing acquisitions allowed under the law, 30 days. Kirsch said that’s not enough time to adequately study what a transaction will do to medical care.

“I was gobsmacked by how superficial, how inconclusive, how nonrobust the investigation was,” said Kirsch, who has examined dozens of Oregon’s oversight reviews. “Some of them were so outrageous, you’d have to say that their eyes were totally closed.”

Pierce-Wrobel said Oregon welcomes “public input to inform our review of individual transactions — as well as opportunities to improve how we implement this new program — in order to advance Oregon’s goals of health equity, lower costs, increased access and better care. That said, the program must operate within its statutory limits.”

Nowhere are the limitations of the review process more evident than in the city of Corvallis, home to both Oregon State University and the Corvallis Clinic, which had operated as an independent, doctor-owned practice since 1947. 

Perhaps ironically, one of the clinic’s executives testified against the law in 2021 on behalf of the Oregon Independent Medical Coalition, a lobbying group for private practices. Scott Shollenbarger said that the group’s members were committed to remaining independent.

“We passionately believe that healthcare is best delivered in an independent business model that is owned and governed by the owners of the business that also are responsible for the delivery of medical services to our respective populations,” he wrote at the time.

But by 2023, the clinic’s finances had deteriorated and it struck a deal to be acquired by Optum Oregon. Kruppa, the former Corvallis employee and shareholder, said the clinic was losing up to $1 million a month at the time.

With hundreds writing to the state to oppose the acquisition, regulators developed conditions to protect patients. They drew up requirements for the new owner to preserve existing clinical programs and accept an independent monitor to ensure compliance.

As Oregon reviewed the deal, the clinic’s finances worsened, Kruppa told ProPublica. Doctors went without paychecks in the month before the deal went through, she said, in order to keep the clinic’s doors open until the transaction was approved.

Then a Russian-linked ransomware hack targeted Change Healthcare, a UnitedHealth subsidiary that provides payment and claims processing to hospitals and doctors’ offices. The attack disrupted medical practices across the country, including the Corvallis Clinic. Kruppa said the clinic was preparing for a bankruptcy filing, worried that the hack would further delay closing the deal.

UnitedHealth said after the hack that it extended $9 billion in no-interest loans to hospitals and medical practices nationwide. In testimony to the U.S. Senate Finance Committee, then-CEO Andrew Witty said: “I want this committee and the American public to know that the people of UnitedHealth Group will not rest — I will not rest — until we fix this.” 

Two weeks after the hack, the clinic told the state it was at risk of going under and asked for an emergency exemption from the ongoing review of the sale. Clinic attorneys assured the state the transaction was “expected to maintain essential services at or above current levels.” By creating a more stable operation, they wrote, the sale would also “improve the Clinic’s ability to attract and retain high-quality candidates for open positions.”

Oregon’s oversight program agreed to dispense with its review — the only exemption it has granted — in just five days. The state jettisoned the guardrails it proposed previously.

Pierce-Wrobel said the state cannot apply conditions to emergency requests that meet exemption criteria specified in the statute, nor can it review the deals afterward to measure their impacts.

“I understand and hear the criticism, but we are responsible for implementing the law that established this program, and that is what was done,” she said.

The practice was “facing serious operational and financial challenges that put patient access at risk” before the hack, the spokesperson said. Since the purchase, “we’ve been working to stabilize practices, recruit clinicians, expand services and improve systems to help ensure patients continue to get the care they need.”

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ProPublica spoke to more than 10 current or former patients. They described sometimes extensive disruptions to their care after the practice was sold: procedures delayed, longer waits for appointments and a steady stream of doctors leaving.

Another said she lost a doctor she trusted so deeply to deal sensitively with her history of trauma that she had no desire to find another doctor, even though she’s supposed to get frequent cancer screenings.

“It wasn’t just an inconvenience, it was disruptive to my continued care with these doctors,” she told ProPublica in an email. “The dreaded letters from Optum informing me that my doctor had left or was soon leaving the clinic just kept coming, one after another.”

Three doctors at Mid-Valley Gastroenterology, a local practice, wrote to state regulators in March 2025 to say that two of the Corvallis Clinic’s gastroenterologists had withdrawn from a pool of area physicians who handled on-call care for emergencies at a major regional hospital system. They said Optum made the specialists opt out to save money.

Mason, the UnitedHealth spokesperson, said Optum did not interfere with or direct the physicians’ decisions. “Physicians make their own decisions about participating in on-call coverage based on what they can reasonably manage alongside caring for their patients,” Mason said.

If Oregon hadn’t exempted the transaction from its oversight, it’s the type of impact that would have faced regulatory scrutiny during a follow-up review.

The state convened a public forum about the deal, hearing testimony about what had happened. But regulators said they couldn’t investigate any further.