Hospital acquisitions and mergers have greatly increased in the last 20 years, causing substantial increases in health care prices. But their effects on quality of care are not well known.

 A study of nearly 200 hospital mergers by department of health care policy research associate Nancy D. Beaulieu, PhD, Bruce V. Rauner Professor of Business Administration at Harvard Business School Leemore S. Dafny, PhD, professor of health care policy Bruce E. Landon, MD, MBA, and Warren Alpert Foundation Professor of Health Care Policy J. Michael McWilliams, MD, PhD, in the New England Journal of Medicine found no evidence that hospital performance on quality measures improved after being acquired. In fact, in one dimension of care – patient experiences – performance declined.

Using Medicare claims and Hospital Compare data from 2007-2016, the study team analyzed quality of care measures before and after 246 hospitals were acquired by other hospitals or health systems, comparing them with hospitals unaffected by the merger activity. They looked for shifts in performance on clinical process measures, patient experience measures, and 30-day mortality and readmission rates for up to 4 years after hospitals were acquired.

While there were no noticeable changes in mortality and readmission rates, hospitals saw a decline in patient experience after merging or acquisition. This decline was not a continuation of preexisting trends or due to changes in the patient population served by the involved hospitals. Changes in clinical process measures were inconclusive because they exhibited improvement before any change in ownership; the improvement stopped after the transactions.

These findings challenge a common argument that hospital mergers improve quality of care, which is particularly important because of the known impact of mergers resulting in higher prices being paid for hospital services.  

This study has been featured in The National Institute for Health Care Management Foundation Research Insights series.