In the last several years, there has been a flurry of consolidation activities among hospital systems across the U.S. In an effort to gain market share and stamp out competition, many systems in both large and small markets have implemented an acquisition strategy in order to improve revenues and eliminate the competition.
While executives with the American Hospital Association cite "internally funded research" that indicated a decrease in revenue and an improvement in quality in the first year following a hospital merger, a newly published study in the New England Journal of Medicine shows that after a hospital merger, costs increase significantly and quality of care did not improve at all.
In the study, researchers examined four accepted performance measures from CMS
Data was examined for 3 years prior and for 4 years after each acquisition. Results showed that patient satisfaction scores declined significantly. Rates of death and readmission rates did not change after acquisition transactions. Data regarding adherence to guideline-based therapy was inconclusive.
The acquisition trend has boomed over the last decade, and hospital executives and stockholders are making lots of money in these deals. Multiple studies have shown that hospital costs after mergers increase almost 10%, and this amounts to trillions of wasted healthcare dollars. There were 90 deals in 2018, 117 transactions in 2017, and an 80% increase from the 50 deals inked in 2009. Hospital leaders tout these mergers as a way to provide better, more accessible, and more affordable care — but in reality, this new very well-done study argues otherwise.
So, now it is clear that hospital mergers increase costs across the board and do not provide any benefit with regard to improved quality of care or outcomes. We must call on our government officials to examine this issue more closely. Once again we are allowing medicine to be shaped and taken over by businessmen and -women — without physician input — with a focus on profit, rather than focusing on the patient.
To me, it is clear that mega-hospital systems provide no benefits to the patient — they are simply a strategic play to increase revenue and further monetize healthcare for non-physicians. Healthcare has become more of a business and less of an art. Unless we act, the patient will forever be a customer and the physician will become nothing more than a Walmart greeter.
A hospital that is acquired by a larger system and get a new prestigious name does not mean the quality gets better.
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