AHA report makes argument that consolidation reduces costs, improves quality

hospital
An American Hospital Association report conducted by economists at Boston-based consulting firm Charles River Associates says data from between 2015 and 2017 actually show hospital mergers helped reduce costs and improve quality. (Getty/peterspiro)

While experts have raised plenty of concerns about provider consolidation driving up costs, a new report commissioned by the American Hospital Association (AHA) released Wednesday concluded—again—the opposite is true.

The report, which was conducted by economists at Boston-based consulting firm Charles River Associates, says data between 2015 and 2017 actually show hospital mergers helped reduce costs and improve quality. 

There are plenty of reasons for that trend, they said: Mergers increase scale, improve care coordination, reduce capital costs and improve clinical standardization.

"The bottom line is, when we talk about mergers and consolidation, people are doing it for a variety of reasons," said AHA President and CEO Rick Pollack on a call with reporters Wednesday.

"It's about improving quality to reduce readmissions and mortality," he said. "It's about providing access—both in preserving hospitals that might go bankrupt if it wasn't for a system coming into rescue them, or providing more sophisticated care than a system can provide. It's about capital for IT and analytics that people couldn't get on their own." 

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