Hospital Mergers Don't Show Quality Benefit

Marcia Frellick

January 03, 2020

Patient experience decreased modestly after hospital mergers and acquisitions, and changes to readmission and mortality rates following the transactions were not significant, a study has found.

"These findings challenge arguments that hospital consolidation, which is known to increase prices, also improves quality," write Nancy D. Beaulieu, PhD, of the Department of Health Care Policy at Harvard Medical School in Boston, Massachusetts, and colleagues in a paper published online January 1 in the New England Journal of Medicine.

Researchers used Medicare claims and Hospital Compare data from 2007 through 2016 to analyze performance on four measures: a composite of clinical-process measures; a composite of patient-experience measures; 30-day mortality; and 30-day readmission rate after discharge.

They conducted difference-in-differences analyses comparing changes before and after acquisition with changes for control hospitals that did not have a change in ownership in that time. The sample included 246 acquired hospitals and 1986 control hospitals.

The researchers observed a modest relative decline on the patient-experience measure (adjusted differential change, −0.17 standard deviation [SD]; P = 0.002). That change was akin to falling from the 50th to the 41st percentile, the authors explain.

Readmission rates saw no significant change (−0.10 percentage points; P = 0.72). Similarly, changes in 30-day mortality rates were not significant (−0.03 percentage points; P = 0.72).

Changes to clinical process measures from 2009 to 2013 were inconclusive because, although they were significantly improved in acquired hospitals (0.22 SD; P = 0.03), most of the improvements came before acquisition.

Clinical process measures include items such as the percentage of heart attack patients given aspirin at discharge; percentage of pneumonia patients or surgery patients given appropriate antibiotics; and percentage of heart failure patients given an evaluation of left ventricular systolic function.

Estimates of the effects of various factors were similar with and without adjustment for patient characteristics or hospital size.

"Our findings corroborate and expand on previous research on hospital mergers and acquisitions in the 1990s and early 2000s and are consistent with a recent finding that increased concentration of the hospital market has been associated with worsening patient experiences," the authors write.

Limitations, they acknowledge, include that they were able to show only average effects of consolidations, which may mask the effects of particular mergers and acquisitions.

Also, they could not rule out a spillover effect of consolidations on control hospitals, which could obscure the relative effect on the merged hospitals. However, nearby hospitals and in-state acquirers were excluded from the control group.

The study was funded by the Agency for Healthcare Research and Quality. Coauthor Leemore Dafny reports being an expert witness (sometimes a litigation expert) for Bates White Economic Consulting. The other study authors have disclosed no relevant financial relationships.

NEJM. Published online January 1, 2020. Abstract

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