More hospitals are merging, but health care isn’t improving

• Quality of care declined slightly at hospitals after a merger, a new study finds.
• More hospitals are merging as a way to share costs, but that often doesn’t lead to better health outcomes.
• It’s possible that care may decline as hospitals that merged face less competition, the study notes.

Hospital executives often tout mergers as a way to cut costs and standardize clinical practices. One thing such deals don’t do, according to a new study in the New England Journal of Medicine: improve the quality of care these hospitals provide.

Indeed, researchers found that measure of cares slipped slightly after hospitals joined forces. The findings raise questions about the ongoing wave of consolidation in health care. During the first three quarters of 2019, there were 71 announced hospital and health system mergers, up modestly from 68 for the year-ago period, according to health care consulting firm Kaufmall Hall. 

The study, published Thursday in the prestigious medical journal, tracked about 250 hospitals that were acquired between 2009 and 2013, with researchers zeroing in on performance measures such as readmission rates and patient experience. 

“Hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates,” the analysis found.

Their conclusion: “These findings challenge arguments that hospital consolidation, which is known to increase prices, also improves quality.”

Not helping consumers

Hospitals might see a dip in the quality of care following an acquisition for a number of reasons, the authors said. For instance, less competition could cause hospitals to exert less effort, resulting in “diminished performance.” 

A hospital’s focus on integrating another health groups could also divert resources away from care, while the study found a decline in patient-experience measures for four years following a merger. Some hospitals with lower ratings for care may also spread their practices to an acquired institution.

One of the study’s authors, Harvard Business School professor Leemore S. Dafny, wrote on Twitter that “there is no systematic evidence that acquired hospitals improve in quality.”

On top of that, previous research has found that health care prices tend to rise after a merger, adding more issues for patients and their families. 

She added, “The reorganization of our hospital landscape, is not, on average, helping consumers.”