Hospital mergers not linked to improvements in patient experience, quality of care: NEJM study

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Crystal Yednak Senior Manager, Health Research Institute, PwC US January 10, 2020


A study published in The New England Journal of Medicine (NEJM) found that when hospitals were acquired by a hospital or hospital system, patient experiences were “modestly worse” and readmission or mortality rates did not change significantly.

The researchers, from Harvard Medical School, Harvard Business School, Beth Israel Deaconess Medical Center and Brigham and Women’s Hospital, used Medicare claims and Hospital Compare data from 2007 through 2016 to examine quality of care measures, including patient experience, mortality and readmission rates.

“Taken together, these findings provide no evidence of quality improvement attributable to changes in ownership,” the authors wrote in the NEJM article about the study, which was funded by the Agency for Healthcare Research and Quality. “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.”

HRI impact analysis

The study’s findings call into question a key argument that providers make in favor of the widespread consolidation that has reshaped the hospital landscape: that the resulting hospital system provides better care.

But this study is likely not to be the last word on a subject that has divided the industry. Provider groups criticized the underlying data, which were pulled from consumer surveys that they deemed unreliable, and insurers said the study was proof that mergers drive up costs without improving care.

In our 2018 report projecting medical cost trend for 2019, HRI estimated that by 2019, 93 percent of most metropolitan hospital markets could be labeled “highly concentrated.” HRI projected that the trend would likely lead to higher prices for medical services in those markets are providers use additional leverage on negotiations with payers.

In the 2018 report, HRI projected ongoing provider consolidation. Almost three out of four provider executives surveyed by HRI that year said that reorganization was important to their organization’s success over the next five years. Many provider leaders told HRI that they are considering merging with or acquiring additional facilities within five years.

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Trine K. Tsouderos

HRI Regulatory Center Leader, PwC US

Tel: +1 (312) 241 3824

Crystal Yednak

Senior Manager, Health Research Institute, PwC US

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