According to an analysis released by the American Hospital Association, hospital mergers may result in significant cost savings and quality improvements for the organizations involved.
"Patients deserve a high-value, high-performing healthcare system," said Rick Pollack, president and CEO of AHA. "The key to transforming healthcare delivery is increased efficiency and quality. In some communities and for certain hospitals, consolidation may be necessary — not only to meet the current health needs of patients and communities — but also to provide a stable foundation upon which to build the healthcare system of the future."
For the report, Hospital Merger Benefits: Views from Hospital Leaders and Econometric Analysis, researchers at Charles River Associates led structured interviews with healthcare executives at 20 hospital systems during 2016 and asked them about their merger experiences. Researchers then compared the responses with a comprehensive econometric analysis that examined mergers within the industry that took place between 2009 and 2014.
Here are four findings from the report.
1. Mergers decrease costs. Annual operating expenses at hospitals acquired by another systems decreased by 2.5 percent on average, equating to $5.8 million.
2. Mergers can drive quality improvements. Mergers may lead to improvements in the quality of care delivered through the standardization of clinical protocols and investments to upgrade facilities at acquired hospitals.
3. Institutions engaging in M&A activity typically expanded the scope of available services. Organizations were able to provide more comprehensive clinical care, researchers found.
4. Executives don't think loose affiliations could garner the same results. Hospital executives interviewed in the study agreed the benefits of merging can't be obtained through looser affiliations with other health organizations.