Advocates for Evidence-Based Health Policy Speakers
Merging Might Make No Difference
As the US healthcare system continues to make steps toward incentivizing physicians on quality over quantity of service, hospitals and provider organizations have been encouraged to undergo mergers and acquisitions to consolidate health systems for the past decade. However, it is unclear if these system-level changes influence patient outcomes and concerns exist that provider mergers may decrease marketplace competition and subsequently decrease quality. One study by Short and Ho aimed to answer whether vertically-integrated provider organizations – larger groups of hospitals and physician groups under one organization – yield higher quality outcomes.
Provider organizations were stratified into different levels of vertical integration to assess several hospital process-level quality measures, readmission rates, and patient satisfaction scores. Of note, this study did not analyze 30-day mortality or length of stay, two other important outcome-level quality measures acknowledged by CMS. While there were decreased readmission rates for patients admitted for pneumonia in more vertically integrated systems, there were insignificant differences in readmissions for patients admitted for heart attack or heart failure. Additionally, there were few changes in adherence of the selected process care measures across systems with different levels of integration, except for use of aspirin for patients presenting with chest pain or possible heart attack within 24 hours of presentation. Patient satisfaction scores decreased with increased market concentration/vertical integration, but the association between clinical quality and patient satisfaction is itself unclear.
Given the limitations of the study and the unclear relationship between different quality metrics, it is difficult to conclude whether vertical integration makes a difference in the quality of care. Increased vertical integration may decrease patient satisfaction scores, but these may not be related to decreased clinical quality of care, given minimal changes to process adherence and only observing decreased readmission rates in more integrated health systems admitting patients for pneumonia. However, with no analysis of other outcome-level quality measures, such as 30-day mortality or length of stay, it is tough to draw a more robust conclusion. Therefore, when considering ways to improve clinical quality of care, systems-level vertical integration may not drive change. Interventions done on a smaller scale, such as at the institution level, should be considered when assessing for changes in clinical quality of care.
Abstract
Provider organizations are increasing in complexity, as hospitals acquire physician practices and physician organizations grow in size. At the same time, hospitals are merging with each other to improve bargaining power with insurers. We analyze 29 quality measures reported to the Center for Medicare and Medicaid Services’ Hospital Compare database for 2008 to 2015 to test whether vertical integration between hospitals and physicians or increases in hospital market concentration influence patient outcomes. Vertical integration has a limited effect on a small subset of quality measures. Yet increased market concentration is strongly associated with reduced quality across all 10 patient satisfaction measures at the 95% confidence level ( p < .05) and 6 of the 10 patient satisfaction measures remain statistically significant with a Bonferroni corrected p value ( p < .005). Regulators should continue to focus scrutiny on proposed hospital mergers, take steps to maintain competition, and reduce counterproductive barriers to entry.
PMID: 30741109
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