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Analysis

M&A Deals Do Not Improve Care Quality at Acquired Hospitals

By Christopher Cheney  
   January 10, 2020

Researchers find a significant but small decrease in patient experience performance at acquired hospitals.

Hospital mergers and acquisitions (M&A) do not result in quality of care improvement, a recent research article indicates.

Hospitals have been involved in a wave of M&A transactions over the past two decades, with studies documenting a surge of deals since 2010. While several other studies have shown that hospital service pricing increases after M&A transactions, there has been relatively little research on the care-quality impact of the deals.

The recent research article, which was published in the New England Journal of Medicine, examined four measures of quality and concluded there was no evidence of quality improvement.

"Hospital mergers and acquisitions were associated with modest deterioration in patient experiences, small and nonsignificant changes in readmission and mortality rates, and inconclusive effects on performance on clinical-process measures. These findings challenge arguments that hospital consolidation, which is known to increase prices, also improves quality," the research article's co-authors wrote.

Examining the data

The research article focused on hospital M&A from 2009 through 2013. The data features 246 acquired hospitals and nearly 2,000 control hospitals.

The researchers concentrated on four measures of care quality after M&A transactions: patient experience based on five metrics from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey; 30-day readmission rates; 30-day mortality rates; and clinical-process measures that include seven metrics related to cardiac, pneumonia, and perioperative care.

Several key data points were generated on the four measures of care quality:

  • There was a significant but small decrease in patient experience performance. The decrease was equivalent to dropping from the 50th to the 41st percentile.
     
  • There was no significant change in readmission rates or mortality rates.
     
  • There was a significant but modest increase in clinical-process measure performance. "But this finding is inconclusive because the differential improvement occurred almost entirely during the pretransaction period," the researchers wrote.

The small decrease in patient experience performance was strongly associated with M&A transactions, the researchers wrote. "The modest decline in performance on the patient-experience measure among acquired hospitals was not a continuation of preexisting trends, was not explained by changes in the patient populations at hospitals, and [it] is consistent with expectations that some acquired hospitals face less competition after acquisition."

The data is consistent with other research on hospital M&A transactions, they wrote.

"These findings provide no evidence of quality improvement attributable to changes in ownership. 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 researchers wrote.

Christopher Cheney is the senior clinical care​ editor at HealthLeaders.


KEY TAKEAWAYS

Several studies have shown that hospital M&A transactions are often associated with increased hospital service prices.

A recent study on care quality after hospital M&A transactions found the deals have no significant impact on readmission rates or 30-day mortality.

The recent study found a decrease in patient experience performance equivalent to dropping from the 50th to the 41st percentile.


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