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Expected quality benefit from hospital M&A not there - study

|About: Health Care Select Sec... (XLV)|By: , SA News Editor

A new study published in the New England Journal of Medicine undermines the often-given benefit of hospital mergers and acquisitions - improvement in quality of services after the transaction.

The authors looked for evidence of quality gains based on four metrics collected by the Centers for Medicare and Medicaid Services (patient satisfaction, deaths within a month of admission, return trips to the hospital within a month of leaving and how often certain heart, pneumonia and surgery patients received recommended care) at 250 hospitals acquired in deals between 2009 and 2013.

The results showed that the quality of care either stayed the same or got worse after the deal, contradicting American Hospital Association-sponsored research conducted by Charles River Associates that found improved quality and lower revenue per admission in the first year post-tie-up.

In 2018, there were 90 deals in the hospital sector, down 23% from 2017's 117 but up 80% from 50 transactions in 2009.

Other studies found higher prices after mergers. For example, a study published in 2018 in the Quarterly Journal of Economics revealed that prices rose 6% after nearby hospitals were acquired.

Hospitals, like drugmakers, are under fire for high prices. The Trump administration has proposed a rule requiring them to disclose negotiated rates with payers, a move that prompted a lawsuit from operators filed about a month ago.

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