Hospitals Merged and Quality Didn’t Improve.

Source Reference

Mergers and acquisitions at hospitals do not improve quality. Hospitals have increased the trend of mergers and acquisitions using the reasoning that quality of care will enhance from greater efficiencies and other criteria.

Indeed, the New England Journal of Medicine published this research that demonstrates that the results are indeed not better. Besides, the study included approximately 250 hospitals acquired from 2009 and 2013.

“Quality didn’t improve,” said Harvard University research associate Nancy Beaulieu, lead author of the study. Unfortunately, the acquisitions not only did not improve quality, the prices also increased after the acquisitions.

Science of Quality

“For the first time there is good science,” said Susan Haas, a visiting scientist at Brigham and Women’s Hospital and the Harvard T.H. Chan School of Public Health’s innovation center Ariadne Labs, who studies risk of harm to patients from health-care transactions.

“From the perspective of regulators, the research offers new grounds to challenge deal makers who assert better quality will follow their transaction. Regulators can now say, Prove it to me,” Dr. Haas said.

Contrary Opinion

Melinda Hatton, general counsel for American Hospital Association quoted research from Charles River Associates that the opposite was true.

Acquisition Trends and Numbers

In 2018 alone there were 90 mergers or acquisitions that were completed with 117 in the previous year.

Furthermore, there are previous studies that confirm that mergers lead to an increase in prices for patients. 6% is an average price increase after mergers.

Hospital Market Sector

What is more, the hospital sector is estimated to be about $1 trillion. Greater scrutiny and public pressure is targeted at this sector given the constant increase in healthcare costs as well as the billing practices by these organizations.  

 “I am concerned about the increasing consolidation in local markets,” Alex Azar, secretary of Health and Human Services, said in an October interview. The White House is seeking to bring more price transparency from hospitals and private insurers.

Conclusion

Finally, Kate Bundorf, an associate professor of health policy at Stanford University who did not participate in the new research, said experts have doubted that the mergers enhance quality given the limited and inconclusive evidence. “We know they have harms. We know prices go up. We don’t really know what’s happening to quality.”