Study: Mergers do little to aid patients
By limiting competition, companies have less incentive to satisfy clients
New research finds that health care consolidation and the integration of hospital and doctor services not only fail to improve quality, but also reduce patient satisfaction.
For years the prevailing wisdom in health care has been that by joining forces, providers would offer better care through streamlined services, gaining efficiency and reducing the amount of waste. It is the rallying cry behind the current explosion of health care mergers and acquisitions.
It is also what researchers at Rice University expected when they analyzed more than two dozen quality measures at 4,438 hospitals of all types and sizes across the nation.
What they found appears to upend current health care dogma.
“Integration is not benefiting patients, said Marah Short, co-author of the paper and associate director of the Center for Health and Biosciences at Rice Universi-
ty’s Baker Institute for Public Policy. Integrated care is loosely defined as coordinated patient treatment from different providers. “We were surprised and had hoped for a different result.”
The findings are now online will be published later this year in Medical Care and Research Review, a medical journal. Vivian Ho, a noted health economist at the Baker Institute, is the other co-author.
Researchers examined 29 quality measures reported to the federal Centers for Medicare and Medicaid Service’s Hospital Compare database between 2008 and 2015. Those markers included patient satisfaction surveys, the number of re-admissions and quality of care reporting.
The study also found that after system mergers and market concentration health care quality dropped across multiple measurements, including less patient satisfaction.
Limited competition means “less incentive to keep patients content or happy,” said Short. The paper called on regulators to scrutinize hospital mergers, take steps to maintain competition and lower barriers that make it difficult for new competitors to enter the market.
The results follow this month’s blockbuster merger news in Houston. One deal, a $29 billion marriage between Dignity Health and Catholic Health Initiatives, which operates St. Luke’s Health System, was completed, creating one of the largest national health systems in the United States. The other, a $14 billion merger between Memorial Hermann Health System and Baylor Scott & White Health of Dallas, was abruptly called off.
All the while the nation’s health care remains in transition. For instance, from 2012 to 2016 the percentage of hospital employed physicians grew by more than 63 percent as health systems continued to buy private practices, the study showed.
In Texas, physicians are generally not allowed to be directly employed by hospitals. The Rice research, however, looks at a range of affiliations between doctors and hospitals, from minimal involvement to full employment.
Mergers and acquisitions also continue to rule the day in health care. In 2018, there were 90 completed mergers, down slightly the record-shattering 115 in 2017. But seven of the announced deals topped the $1 billion mark, according to data from Kaufman Hall, the consulting and research firm. Texas led the nation in 2018 with eight announced deals, although that includes the scrapped Memorial Hermann-Baylor Scott & White merger.
Concerns about mergers and market concentration have tended to focus on rising price. Few studies have looked at the impact on quality.
“If hospital systems focus as much on quality as on revenue growth we would have some real opportunity to improve outcomes,” said Chris Skisak, executive director of the Houston Business Coalition on Health, a nonprofit organization that helps businesses gain access to coverage. “Quality seems to have taken a back seat,”
One study, published a year ago in Health Services Research, did tackle the quality issue with troubling results. Medicare heart patients in markets where cardiology practices consolidate saw their conditions deteriorate and death rates increase, said Thomas Koch, an economist with the Federal Trade Commission and co-author of the study.
Short acknowledged Houston is in a unique position because of its many health care choices which could mitigate the issue of lack of competition.