Whether it's quality, prices, or spending, consolidation doesn't often enhance the value of care delivery.
As more and more hospitals and health systems pursue integration, the potential negative impact on patients shouldn't be overlooked.
Consolidation seldom leads to better quality of care delivered or reduced prices, according to a study published in the Journal of the American College of Surgeons. Organizations must weigh the strategic and financial benefits of mergers and acquisitions against the consequences for the communities they serve.
The study's authors reviewed 37 studies published from 2000 to 2024 that met the criteria of including horizontal or vertical consolidation, and reporting on at least one measure of value (price, cost/spending, and quality).
Of the 26 studies that measured quality of care, 20 (77%) demonstrated no change or lower quality after integration, while only six studies showed improved quality, driven by better care management processes instead of outcomes.
Of the 14 studies measuring price changes, 13 (93%) featured increased charges, whereas 13 of the 16 studies (81%) focused on health care spending revealed higher costs or no charge.
“Proponents of health care integration have claimed it controls costs and enhances care quality,” Bhagwan Satiani, lead study author and professor of surgery emeritus at The Ohio State University Wexner Medical Center, said in a statement. “But we found that evidence is lacking that integration alone is an effective strategy for improving the value of health care delivery.”
Overall, eight of the 37 studies (22%) found that integration had a positive net impact, versus 20 studies (54%) which showed a negative net impact.
“These findings provide an opportunity to better define value with a focus on benefiting patients while balancing the financial stability of the health care industry,” Satiani said. “Quality improvement in health care cannot be achieved by mergers and acquisitions alone.”
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Nearly four out of five studies (77%) published from 2000 to 2024 that measured quality of care showed decreased quality or no change following a hospital merger or acquisition, a study published in the Journal of the American College of Surgeons revealed.
Additionally, 13 of 14 studies (93%) assessing price changes showed an uptick in charges, while 13 of 16 studies on spending illustrated increased costs or no charge.
Though hospital M&A can be necessary for organizational sustainability, it cannot alone improve care quality and reduce costs to advance healthcare system.