Rural hospitals cut maternal, surgical care services, limit mental health access after acquisition, study finds

A new Health Affairs analysis suggests recently acquired rural hospitals were more likely than those that remained independent to shut down their maternal, neonatal and surgical care services.

The study also found mental health and substance use disorder stays remained stable at the catchment areas of acquired rural hospitals at the same time those discharges increased for rural facilities that hadn't been acquired, which researchers said could indicate an unmet need for these services across the merged hospitals’ broader communities.

“Mergers might be a strategy to keep rural hospitals afloat in precarious financial times, but the trade-off may be a hospital that is less responsive to community needs,” Rachel Mosher Henke, senior director at IBM Watson Health, said in a statement.

Henke, along with colleagues from IBM Watson Health and the Agency for Healthcare Research and Quality, identified 172 rural hospitals that merged between 2009 and 2016 across 32 states and matched those with 549 comparison hospitals that had remained independent. Facilities that merged were less likely to be critical access hospitals, had more beds, were more often privately owned and were more often located in the South.

Average number of hospital stays generally dropped across the maternal/neonatal and surgical service lines for both merged and independent comparison hospitals in the years following a merger, with those declines being greater among the merged facilities. Mental health/substance use stays remained steady across merged hospitals but increased across comparison hospitals.

RELATED: Rural hospitals saw mortality improvements after acquisition deals, study finds

After adjustment, the researchers found that the percentage of facilities providing any maternal/neonatal services decreased 6.7 percentage points more among merged hospitals than their independent counterparts one year following the merger. This difference increased to 7.2 percentage points two years after the merger but became insignificant in subsequent models examining three, four and five years post-merger.

For the hospitals’ surgical service line, the analysis showed a five percentage point greater decrease for merged hospitals compared to independent hospitals after one year. The difference in service line offerings between the groups was insignificant two and three years after acquisition but was again significant four years (−8.4 percentage points) and five years (−9.8 percentage points) after the acquisition year.

An analysis of catchment area use (intended to determine whether individuals are receiving unoffered services elsewhere in the community) did not suggest any significant declines across the five-year post-acquisition period, “suggesting that hospital mergers generally did not negatively affect access to inpatient care,” the researchers wrote.

The hiccup was catchment area stays for mental health or substance use disorders, which had been relatively stable for acquired hospitals but jumped 12.4% in comparison hospitals’ catchment areas.

That translated to a significant 10.8 percentage point greater increase in mental health or substance use disorder stays at the independent hospitals after one year, a nine percentage point difference after two years and a 12.4 percentage point discrepancy after three years. According to the authors, this “suggests that communities with merged hospitals may have experienced decreased access to behavioral healthcare.”

RELATED: Physician-hospital consolidation causes Medicare spending on labs, imaging to soar: study

The researchers conducted their analysis using merger and inpatient stay data collected between 2007 and 2018. The merger data came from Irving Levin Associates and the American Hospital Association (AHA), while stay data were collected from the Healthcare Cost and Utilization Project’s State Inpatient Databases.  

Researchers said their findings build on a prior review of AHA annual surveys during the same time window, which found a decrease in obstetric and outpatient primary care services and a reduction in diagnostics and nonemergency outpatient services availability. That study’s exclusion of discharge data, they wrote, led to limited evidence that the rural hospital mergers led to reduced inpatient services.

“Mergers may provide funds, resources and strategic direction for hospitals to realign their services to achieve financial solvency, but reduction of service lines within the acquiring hospital or health system might not be consistent with the health needs of the community,” the researchers wrote.

The new data come just a few weeks after another review of rural hospital acquisitions from the same authors suggested that those facilities achieved mortality rate improvements across multiple common conditions after joining up. That analysis included 172 mergers between 2009 and 2016 and was theorized to be the result of the increased resources and best practices that some rural hospitals may not have access to otherwise.

Both analyses add to the industry’s contentious debate over the positive and negative impacts of provider consolidation.

Even President Joe Biden threw his hat into the ring with a July executive order calling upon the Justice Department and the Federal Trade Commission to “review and revise merger guidelines to ensure patients are not harmed by such mergers.” The move spurred pushback from the hospital industry, which recently called for a meeting with federal officials to discuss the added scrutiny.