Payers, providers spar over NEJM study that suggests hospital mergers don't improve care

Photo of two men shaking hands in front of a hospital
A new study found that acquired hospitals had worse patient experience measures compared to hospitals that have not been acquired. (cunaplus/Shutterstock)

Insurers seized on a new study that shows hospital acquisitions have a modest impact on patient quality, while the hospital industry is rebutting the findings.

The New England Journal of Medicine published a study Thursday that found hospital acquisitions of another hospital led to a modest decline in the patient experience but no significant changes in mortality or readmission rates. The study comes amid an ongoing battle between the payer and provider industries on the benefits of hospital acquisitions that have increased in recent years.

“Despite industry claims to the contrary, evidence demonstrates large hospital mergers not only drive up costs but do not improve quality of care,” according to a statement from the insurance industry group America’s Health Insurance Plans (AHIP) on the study.

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The study looked at 246 hospitals that had been acquired from 2007 to 2016 and 1986 hospitals that weren’t acquired. Researchers examined their performance on four measures: patient experience, mortality, readmissions and clinical process.

The study found acquired facilities led to a modest decline in the performance on patient experience, which measures the range of interactions that patients have with a healthcare system such as timely access to information or good communication.

However, there were no significant changes to hospital mortality or readmissions after 30 days of discharge compared to hospitals that weren’t acquired.

But the effects on clinical process measures, which examines a process that leads to a healthcare outcome, were inconclusive. Acquired hospitals showed improvement in performance on clinical process, but this couldn’t “be attributed conclusively to a change in ownership because differential improvement occurred before acquisition,” the study said.

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Mergers and acquisitions among hospitals and health systems have been on the rise in recent years. A 2018 report from the firm Kaufman Hall found there were 90 deals, punctuated by mega-mergers among large, regional health systems.

The deal frenzy has put increased attention on the benefits of such deals, especially as the Trump administration has started to crack down on price transparency in hospitals.

AHIP pegged mergers between hospitals and with physician practices as key reasons for higher prices in the healthcare system.

“By no surprise, research has found that when health systems in a region get bigger and squeeze out competition, prices go up for consumers,” AHIP said in a statement last June before a Senate hearing on healthcare facility consolidation. “That is a basic economic reality.”

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The hospital industry group American Hospital Association (AHA) said in a statement that the recent study is flawed. The AHA said that the study relies on responses from patients via the Centers for Medicare & Medicaid Services’ Hospital Consumer Assessment of Healthcare Providers and Systems

While the survey can be useful on patient experience, “using data collected from patients to make claims about quality fails to recognize that it is often incomplete, as patients are not required to and do not always respond comprehensively,” said Melinda Hatton, AHA’s general counsel, in a statement.

The survey also “does not capture information on the critical aspects of care as it is delivered today,” Hatton added.

Hatton also pointed to a study commissioned by the AHA and conducted by the Charles River Associates consulting firm that found mergers “result in benefits to patients and communities in the form of better care and significant cost savings.”

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