Hospital M&A Doesn’t Enhance Patient Experience, Quality of Care, Study Finds

Hospital acquisitions have become commonplace in recent years, but a new study has found that these types of mergers are associated with modestly worse patient experiences and no significant changes in readmission or mortality rates.

Researchers, who recently published the study in The New England Journal of Medicine, noted that the hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010.

Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects on quality of care is limited, they stated.

Using Medicare claims and CMS’ Hospital Compare data from 2007 through 2016 on performance on four measures of quality of care (clinical-process measures, patient-experience measures, mortality, and the rate of readmission after discharge) and data on hospital mergers and acquisitions occurring from 2009 through 2013, the researchers conducted difference-in-differences analyses comparing changes in the performance of acquired hospitals from the time before acquisition to the time after acquisition with concurrent changes for control hospitals that did not have a change in ownership. All the hospitals had at least 25 beds and had admitted at least 100 fee-for-service Medicare patients per year.

The sample ultimately included 246 acquired hospitals and 1,986 control hospitals. The key findings were that acquired hospitals witnessed a patient experience that was moderately worse, on average; patient experience satisfaction score decline from the equivalent of 50th percentile to 41st. Further, 30-day mortality and readmission rates stayed largely the same at such facilities.

The one enhancement found was that acquired hospitals had a significant differential improvement in performance on clinical process measures, but as the researchers stated, this could not be attributed conclusively to a change in ownership because differential improvement occurred before acquisition.

A separate study last year from Rice University that analyzed 29 quality measures reported to the Hospital Compare database from 2008 to 2015 also tested whether vertical integration between hospitals and physicians or increases in hospital market concentration influence patient outcomes. The results revealed that M&A “has a limited effect on a small subset of quality measures. Yet increased market concentration is strongly associated with reduced quality across all 10 patient satisfaction measures.”