UK study: Hospital mergers lead to more patient deaths and more readmissions

The past few decades have seen a concentration of hospitals and other health care services in the United States. In 2005, about half of US hospitals were part of a larger system. In 2017, two-thirds were. Most places in the US have what is considered a highly concentrated hospital market, meaning that one company operates the hospital facilities in that area.

This concentration is one of the most important trends in American health care. It can lead to fewer options for patients and higher prices. A new study finds that higher hospital prices are driving up US health spending. Hospitals acquired by larger systems sometimes cut essential services, such as maternity care, forcing patients to travel hours to receive medical services they could receive locally.

As I wrote late last year, America’s smaller community hospitals, most of which operate at a deficit, are often forced to explore mergers with larger health systems in order to keep their doors open.

Higher costs are bad news for patients. But it is difficult to analyze the clinical consequences of the merger: Does a more concentrated hospital system also lead to worse care? There are many variables at play, and mergers can disrupt the health care market (through higher prices) in ways that make it difficult to isolate how changes in hospital operations after a merger have contributed to increased deaths or readmissions.

A recent study of hospital mergers in the UK attempts to shed light on these questions. It was found that after the hospital merges, patients are more likely to die during or shortly after their stay in the hospital and are also more likely to be readmitted twice in the near future, according to new research from scholars at Cornell University and the University of London. The increase began within months of the merger and persisted for at least two years, the researchers found.

Most UK hospitals are publicly owned, but the national government is still making mergers a priority to improve the health system’s performance by merging financially struggling hospitals with other hospitals. In practice, UK hospital mergers often look like US hospital mergers: Separate facilities that once operated under separate management are brought under the supervision of one board and one senior leadership team.

The size of the merger’s impact, particularly on mortality, was substantial: The likelihood that a patient would die in hospital or within 30 days of discharge increased by 0.4 percentage points, a 27 percent increase from the pre-merger mortality rate. 1.4 percent. They were also 11 percent more likely to be readmitted within 30 days of being discharged from the hospital.

In 139 hospitals that participated in 13 different mergers from 2006 to 2015, this increase in deaths and readmissions translated into 60 additional deaths and 140 readmissions when compared to a large control group of British hospitals that did not undergo mergers in the period.

“Mergers and acquisitions raise some antitrust concerns, especially if market consolidation can lead to higher prices or poorer product quality,” the authors, the University of London’s Elena Ashtari Tafti and Cornell’s Thomas Hoe, wrote to reveal the conclusion. “Both of these effects are particularly important in the health care market, which has seen significant merger activity over the past two decades, and where price and quality can be matters of life or death.”

In the US, evidence on how mergers affect quality of care is limited and mixed. But the UK and the National Health Service may be an ideal setting to study these effects, the authors argue, because payments and the mix of payers have not changed as a result of the merger. That removes one variable that could confound similar research in the US. They studied the period from 2006 to 2015 partly because it followed reforms in the NHS that gave patients more choice about where they were treated and created hospitals with fixed budgets for operations.

Ashtari Tafti and Hoe mention the special features of the UK health system as a virtue of their research. They also point out that their findings are a logical extension of previous studies that found quality of care improved in more competitive hospital markets. But he acknowledged more work needs to be done to determine whether these results would be replicated in different health systems with different payment structures, such as the US.

I asked Hannah Neprash, a health economist at the University of Minnesota, who did not contribute to the research, whether she thought what researchers in the UK found would apply in the US. They pointed out that the study sample was quite small (13 combined affecting 139 acute care hospitals; for context, the British control group included about 1,100 hospitals and the US had about 5,000 similar facilities). They also noted some specific findings (such as an increase in kidney-related mortality) that require further clarification and explanation, and the researchers mentioned how specific changes in hospital operations post-merger affected clinical quality should be the subject of future inquiry.

“To me, there are still questions about generalizability, but it’s not because things are different between US and UK hospitals,” he said.

Patients in the US have reported a worse experience when being treated at hospitals that have undergone mergers. This new study shows that there are also measurable effects on the more objective quality of care.

The US health system, given the wrong financial incentives, has made more hospitals merge in an effort to stay open, to run more efficiently, and in theory, to better coordinate services for patients. Federal regulators have tried to stop the merger, but are facing various obstacles and obstacles. Hospitals are now making the case that consolidation actually benefits patients — with little empirical evidence to disprove it — to justify the merger to public officials.

But a persistent concern is that the quality of care could deteriorate if hospitals face less competition. What Ashtari Tafti and Hoe see in their research suggests these concerns should be taken seriously when regulators review future mergers and acquisitions.