Hospital Mergers and Patient Care: Striking the Right Balance

A new study looks at what happens when smaller hospitals are purchased by larger health systems. The results are not great news for consumers.

According to Healthcare Dive, when independent hospitals are acquired by large health systems, there’s a reduction in operating costs but an increase in prices for patients.

That’s not all.

Patients are also more likely to be readmitted if they are cared for by a hospital that has undergone a merger in the last three years.

So why are hospitals consolidating?

The main motive appears to be the opportunity to gain more resources, negotiate better contracts with health plans, and greater administrative efficiencies. While these are important to the financial health of hospitals, they come at the expense of quality patient care.

Now, as more hospitals consolidate, there’s a shortage of independent hospitals; mega health systems now occupy a substantial 81% of hospital beds nationwide. Other studies show that in a quarter of hospital markets, there isn’t a single independent hospital left.

While the pandemic initially slowed merger and acquisition activity, it has since rebounded to pre-pandemic levels.

Some states are alarmed by the trend. Politicians in Minnesota gave their attorney general oversight into some mergers – even killing a proposed merger between Sanford Health and Fairview Health Services. The U.S. Federal Trade Commission (FTC) is also paying attention to these deals. Just last month, the FTC announced new antitrust merger guidelines. What about where you live? Are there any independent hospitals? If your local hospital has merged with a larger system, what results have you seen?  Share your story with us!