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Hospital M&A did not improve patients' quality of care, study shows

A new study published in the New England Journal of Medicine shows that hospital M&A did not improve patients' quality of care, countering arguments made by the hospital industry.

The Jan. 2 study used four metrics to define the quality of care: Clinical-process measures; patient-experience measures; the rate of readmission after discharge; and mortality rate.

After examining M&A deals from 2009 through 2013, researchers found a slight decline in patient experience after acquisitions and no change in readmission rates or mortality rates.

Researchers said the decline in patient-experience metrics, measured by patient surveys, was not a "continuation of pre-existing trends, was not explained by changes in the patient populations at hospitals, and is consistent with expectations that some acquired hospitals face less competition after acquisition."

Results for clinical-process measures were inconclusive, according to the study.

The study was funded by the Agency for Healthcare Research and Quality, which is a part of the U.S. Department of Health and Human Services.

Researchers used Medicare claims and hospital data from the Centers for Medicare and Medicaid Services from 2007 through 2016 for quality measures, and hospital M&A data came from the research publishing company Irving Levin Associates Inc.

Industry pushback

Melinda Hatton, general counsel for the American Hospital Association, a national hospital representative, pushed back against the study's findings, saying in an emailed statement that relying on patient experience surveys was not an accurate representation of the quality of care.

"Of specific note, while we find that [the Hospital Consumer Assessment of Healthcare Providers and Systems survey] can be a useful patient experience survey, 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, and the survey does not capture information on the critical aspects of care as it is delivered today," Hatton said Jan. 2.

While the study points to a decrease in quality of care, the hospital industry argues that mergers increase the quality of care in hospitals.

A September 2019 report funded by AHA and prepared by the consulting firm Charles River Associates shows that mergers led to reduced rates of readmissions and mortality.

Hospital market concentration has been a consistent trend in the healthcare space, and rating agencies such as Fitch Ratings and Moody's said in December 2019 reports that M&A will continue to be a topic to watch in 2020.

The hospital industry says that M&A increases the quality of care and decreases prices. However, some economists claim that the lack of competition from market concentration actually leads to a decrease in the quality of patients' care and an increase in prices.