News: Hospital acquisitions by health systems yield negative quality outcomes, report suggests
The corporatization of acquired independent hospitals yields negative effects on staffing, prices, and quality patient outcomes, a new report from the Leonard Davis Institute of Health Economics at the University of Pennsylvania suggests.
The report examined 101 hospital acquisitions occurring between 2013 and 2017. According to the authors of the report, the “[i]nitial corporatization” of independent hospitals offered “efficiency and revenue gains to the acquired hospital through staffing reductions and price increases.”
The findings of the report were broken down into three distinct sections:
- Effects on profitability: Acquired hospitals made approximately $14 million per year, “mainly,” the report noted, “by cutting nonclinical staff in administrative and supply, medical records, and pharmacy departments.” The report noted that of the $11.2 million in annual reduced expenditures, a full 60% were from cutting jobs.
- Effects on prices: According to the report, average inpatient prices post-corporatization rose by 11%, with average prices per hospital stay increasing by $856.
- Effects on quality: The researchers also examined common quality measures, such as hospital readmissions, mortality, and patient satisfaction. Using “commercially insured cardiac care patients” as a case study, the authors found that readmission “increased linearly” with staff reduction, suggesting “potentially short term quality” after the initial acquisition.
“The growth in multihospital systems could theoretically curb health care costs and increase affordability if gains pass to payers and then to consumers through lower insurance premiums,” the authors suggested. “This issue, and the impact of hospital corporatization on quality of care, needs further detailed investigation, so antitrust regulators can ensure that hospital ownership changes do not negatively impact patients’ costs and care.”
Editor’s note: To read the full report, click here.