Key Takeaways
- A brand new paper discovered that hospital mergers in the end result in larger mortality charges at consolidated services.
- Hospital workers wages decline because the ratio of sufferers to workers rises, which jeopardizes the standard of affected person care.
- The examine means that the trajectory of U.S. hospital mergers is regarding and can trigger extra future hurt to native communities as they proceed.
- Hospital consolidation also can result in larger medical insurance costs nationwide.
Hospital mergers are unhealthy for Individuals’ well being, in response to a brand new paper printed by the Nationwide Bureau of Financial Analysis (NBER).
Utilizing knowledge from almost 150 high-concentration hospital mergers within the U.S. between 1996 and 2022, the paper discovered that decreased staffing, larger prices, and a decrease high quality of affected person care culminate in elevated mortality charges within the native communities the place mergers happen. However the pressure of this market consolidation isn’t restricted to their native communities.
“When native hospitals merge collectively, they increase costs, contributing to the excessive prices of well being care in the USA,” stated paper creator Bradley Setzler, a professor of economics at Penn State.
What Occurs When Hospitals Merge?
The paper concluded that hospital mergers usually set off a series response. They cut back the variety of medical suppliers—and competitors—inside a given market, decreasing incentives for bettering or sustaining the standard of care. Hospital mergers and acquisitions additionally include substantial staffing and funding cuts.
Setzler’s analysis discovered that, inside merging hospitals, wages decreased by 2% to 4% throughout affected person care and non-patient care occupations, whereas employment ranges fell by 9% to 13%. Remaining well being care staff shouldered these decreases whereas taking over extra work, with the variety of hospital workers per affected person in merged hospitals declining by a minimum of 6%.
“These cuts not solely hurt staff, but in addition result in understaffed hospitals that ship a decrease high quality of care to sufferers.” Setzler stated.
This decrease high quality of care in the end results in extra deaths: The paper discovered the risk-adjusted all-cause mortality charges for coronary heart failure and pneumonia sufferers at merged hospitals elevated by 0.5-0.8 share factors, in comparison with baseline mortality charges of 12% to 13%. Including insult to damage, sufferers pay larger costs for this subpar care.
“Provided that well being care is America’s largest business, suppressed wages and inflated costs are anticipated to considerably hurt communities,” stated Setzler. “This creates a troubling cycle the place decreased employment alternatives weaken native economies whereas larger well being care prices burden each households and companies.”
The Argument for Hospital Consolidation
Hospital consolidation within the U.S. has trended upward over the previous few many years—and the brand new NBER examine isn’t the primary to name out its unfavourable results. However there’s discord throughout the well being care group about whether or not the professionals outweigh the cons.
In 2023, the American Hospital Affiliation (AHA), which represents almost 5,000 hospitals, well being care programs, networks, and different care suppliers, argued to Congress that smaller and rural communities profit from mergers, primarily based on the rise in well being care entry that comes with being absorbed into a bigger hospital community.
“Mergers and acquisitions are a significant instrument to maintain financially struggling hospitals open and permit hospitals and well being programs to cut back prices, enhance high quality, and higher serve sufferers the place they stay,” stated Colin Milligan, the senior director of media relations for the AHA.
The Authorities’s Position
Congressional leaders from each side of the aisle have sounded the alarm about rising well being care consolidation. In a Home Funds Committee Listening to in 2024, lawmakers heard about how mergers and vertical integration within the well being care business are driving up prices for the federal authorities and sufferers alike.
However President Donald Trump has reversed strikes geared toward decreasing market focus.
“Whereas I can’t predict a selected breaking level, the trajectory is regarding,” stated Setzler. “If hospitals are permitted to proceed consolidating, it’s anticipated to result in larger costs and worsening take care of sufferers, whereas persevering with to suppress wages and employment alternatives for well being care staff.”
