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Hospital Merger Effect on Care Quality and Costs

January 02, 2020

In the last 20 years, the health care industry has seen a substantial increase in hospital mergers and acquisitions, which many studies show have increased costs for commercially insured patients but data is lacking on the impact on care quality.

Per a study published in the New England Journal of Medicine examining 246 acquired hospitals and 1986 control hospitals, “Hospital acquisition by another hospital or hospital system was associated with modestly worse patient experiences and no significant changes in readmission or mortality rates.”

Nancy D Beaulieu, PhD, department of health policy, Harvard University, and colleagues examined Medicare claims and Hospital Compare data from 2007 through 2016 on measures of care quality that included a composite of clinical-process measures, a composite of patient experience measures, mortality, and readmission rates after discharge.

In addition, further hospital mergers and acquisitions data from 2009 to 2013 was also collected that allowed Dr Beaulieu and colleagues to conduct difference-in-difference analyses for hospital performance measures before and after acquisition and control hospitals.

According to the study, acquired hospitals were associated with a modest differential decline in performance in the patient experience measure, (adjusted differential change,- 0.17 SD; 95% confidence interval [CI], -.26 to -.07;P=.002). Readmission rates and mortality had little to no significant differential changes.

Acquired hospitals did show a significant differential improvement in performance on the clinical-process measure (0.22 SD; 95% CI, 0.05 to 0.38; P=0.03), but Dr Beaulieu and colleagues noted that this observation “could not be attributed conclusively to a change in ownership because differential improvement occurred before acquisition.”

This research was supported by a grant from the Agency for Healthcare Research and Quality.

—Edan Stanley


Beaulieu ND, Dafny LS, Landon BE, Dalton JB, Kuye I, Mcwilliams JM. Changes in quality of care after hospital mergers and acquisitions. N Engl J Med. 2020;382:51-59;doi:10.1056/NEJMsa1901383

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