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.

Webinar

How Providers Can Leverage Technology to Accelerate Business Recovery

Join us for this webinar on July 14th at 1pm ET / 10am PT to hear how organizations are responding to the COVID-19 crisis, re-engaging patients with postponed elective services, and utilizing contact tracing to support the health and wellbeing of their communities.

"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." 

RELATED: Employers skeptical that healthcare industry consolidation will pay promised dividends

Suggested Articles

Enrollment in the ACA's exchanges could increase by more than one million due to massive job losses caused by the COVID-19 pandemic.

Tenet Healthcare Corp. will pay $72.3 million to settle a whistleblower lawsuit involving alleged kickbacks to surgeons at an Oklahoma City hospital.

Telehealth startups continue to flourish. Case in point: Doctor on Demand raised $75 million in series D financing led by General Atlantic.