Consolidation can lead to quality improvements

As Congress considers revising the Affordable Care Act, objective data showing its impact on hospital and health system performance should be considered. Truven Health Analytics, part of the IBM Watson Health business, performed research for Modern Healthcare that demonstrates two positive findings: Hospitals are providing greater value to the communities they serve, as measured by a national balanced scorecard, and health systems are changing individual hospital performance for the better, thereby increasing value, as measured by the national balanced scorecard. Change across the hospital industry can be slow. However, from 2011 to 2015, a substantial percentage of hospitals showed significant gains across multiple domains of performance, ranging from inpatient and post discharge quality, efficiency and patient perception of care. Hospital expenses, unadjusted for inflation, were flat, reflecting no significant increase over five years for more than 78% of hospitals. Improved performance across domains on the national balanced scorecard demonstrates that many hospitals are getting stronger and are better able to increase value.

Contrary to what we have read in previous peerreviewed literature, our study shows the consolidation of hospitals into health systems is positively affecting hospital performance when compared with independent hospitals. The results show that, overall, hospitals in health systems consistently outperform their independent peers across more than half of the measures making up the balanced scorecard. The largest impact is shown in medium and small community hospitals. Health systems are making statistically significant change in performance and strengthening member hospitals, thereby raising value provided to those communities.

What does this mean? Under the ACA and value-based payment, payer incentives are finally aligning with the mission and purpose of providers, and this is a win-win– win for patients, hospitals and payers.