In a hospital merger, the staff, facilities, and other resources of two or more hospitals are combined into a single institution. Although hospital mergers are motivated by a variety of reasons, such as economies of scale, improved patient care, and increased market share, they can also lead to negative consequences for patients, such as longer wait times, reduced access to care, and increased costs.
The merging of hospitals has occurred at a rapid pace for the past decade. According to data analysis, the average cost of a hospital stay has risen sharply. President Trump has called for increased competition in his executive order. The impact of hospital consolidations on rising healthcare costs is being closely examined by lawmakers. Dignity Health and Catholic Health Initiatives, two large chains, are expected to become two of the largest health care organizations in the country. Baylor Scott Healthcare System and Memorial Hermann Health System, two of Texas’ largest health care systems, have announced plans to combine. Numerous studies have confirmed that hospital consolidation is driving up medical costs.
West Virginia’s largest health system, which employs over 5,000 people, has its own campus, according to the system’s chief executive, Albert L. Wright Jr. Mr. Wright says large systems are paid more by insurers. Between 2012 and 2014, the cost of a hospital stay in Parkersburg-Vienna increased by 54 percent. When a company merges, the majority of patients are unlikely to reap the benefits of lower insurance premiums or out-of-pocket expenses. The executive discusses how to reduce the total cost of care in the same breath as they discuss how to charge insurers more for care. It is unclear whether mergers improve patient care because patients pay more for a well-known brand. The hospital group, the Phoebe Putney Health System, did not accept the findings. Lee County plans to construct a 60-bed hospital in Albany to promote competition among health care providers. In Washington state, officials accused Franciscan Health of raising prices through its ties to the hospital chain.
As a result, hospitals that merge into larger organizations gain a larger market share in consumer healthcare. As a result, if they choose to sue, they will have an open court case in which to ask health insurance companies to cover more medical care and procedures. It is not the insurers’ fault that these prices are rising, but rather the consumers’ fault.
There are numerous purported benefits associated with hospital mergers, such as patient coordination, data sharing through electronic medical records, population health management, risk-based contracting, standardizing care, and joint purchasing, which can be accomplished through alternative methods that do not harm competition.
Hospital mergers continue to be a significant and ongoing phenomenon in the US healthcare market. Between 1998 and 2017, nearly 1,600 hospital mergers were completed (Gaynor 2020).
What Happens When A Hospital Merges?
What happens when a hospital merges? There are a few different things that can happen when a hospital merges. The first is that the two hospitals may simply combine their resources and continue to operate as two separate entities. The second is that one hospital may absorb the other hospital, and the third is that the two hospitals may form a new hospital. In any case, the two hospitals will likely have to work together to figure out how to best serve the needs of their patients.
Several hospital merger decisions have dominated the news in recent weeks. Here are five reasons why hospitals should merge into one. If both systems merged, they would benefit from one another. To accomplish this, the clinical protocol system as a whole must be streamlined and a stronger management team must be put in place. When a hospital system is unable to provide the necessary level of care to its patients, it is likely to close. If a hospital system merges, the entire system will benefit. Several large hospital systems are widely known to have standard protocols in place that allow them to view patients at various hospitals in a single visit without delay.
What Are The Potential Benefits And Drawbacks Of Hospital Mergers?
Nurses in hospitals that merged saw their wages fall by 10.8% between 2002 and 2007, according to a 2002-2007 study. Hospital administrators saw their wages fall by 7.5% as well. What are the advantages and disadvantages of hospital mergers? According to a 2013 study published in the Annals of Internal Medicine, hospital consolidations are associated with modestly improved patient outcomes such as reduced mortality and readmission rates. Furthermore, it was discovered that the number of hospitals in a labor market can have a negative impact on wage growth for workers such as nurses and skilled workers, as well as those in administrative positions. According to a 2002-2007 study of hospital mergers, nurses’ wages fell by 13.8% when combined hospitals.
What Can Be A Negative Consequence Of Hospital Merging?
In the future, communities may lose access to services and care if not immediately, as services consolidate under the new system. The loss of revenue for local businesses as a result of extensive employee layoffs or closures is unavoidable. Staff members from the same hospital may face job losses within their community.
According to studies, hospital mergers typically lead to an average price increase of 6% to 7%. In this month’s study, there was no evidence of improvement in patient quality or unsatisfactory patient experiences. Hospitals do not reduce prices by merging with others. To gain market dominance, insurers are forced to negotiate with the company. A Harvard study confirms what many people have long suspected. It is common for hospitals to make changes to their operations in order to improve care delivery. When surgeons concentrate on the right patient, they experience better outcomes, fewer complications, and faster recovery times.
A hospital’s focus on flashy med-tech that boosts profits fails to recognize technology that improves patient safety and quality. According to a recent study published in the New England Journal of Medicine, hospital consolidation is not lowering prices or improving patient care. As a result, it is best to use this approach when the patient is prepaid for care, implying that there is no financial incentive for unnecessary services.
Hospital Mergers: More Harm Than Good?
Despite popular belief, the overwhelming amount of data shows that hospital mergers don’t always improve patient care. Although mergers do improve clinical quality, this is not always the case – it remains neutral or deteriorates over time. Instead of improving patient care, the majority of hospitals combine for financial reasons. As a result, the company’s focus has shifted from patient care to increased profits. Mergers have a negative impact on employees in some cases. According to research, mergers can erode wage growth for workers such as nurses and skilled workers, as well as administrative employees. Employees may have to take on lower-paying jobs in order to be able to maintain their lifestyles. Furthermore, while most research shows that hospital mergers do not improve patient care quality, it remains neutral or deteriorates after a few years. As a result of the merger, patients may be treated in poorer ways. In the end, hospital mergers do not always benefit patients or employees. There may be short-term benefits for some, but long-term consequences can be disastrous. A hospital is more than just a business, it is dedicated to providing community-quality healthcare. To keep patient care intact, keep an eye on mergers and ensure that they do not compromise.
Are Hospital Mergers Good For Patients?
As a result of the overwhelming amount of data collected during mergers, hospital transactions either have no positive impact on patient care quality or have a negative impact on it. As a result, the majority of studies show that mergers have no effect on clinical quality, whether neutral or deteriorated.
According to new research, hospital mergers have significant benefits for patients and the communities in which they operate. When a group of businesses joins, their morbidity and mortality rates are significantly reduced. The use of mergers also results in the development of clinical best practices. Patients will continue to have access to care and a diverse range of services if the health system integrates. According to a Charles River Associates study, hospital mergers can lead to higher quality healthcare at a lower cost. Clients have relied on CRA for more than 50 years to provide their unique combination of functional expertise and industry knowledge. It is a not-for-profit organization founded in 1927 that represents health care providers and consumers.
Purchasing hospitals, according to these findings, may not always result in improved patient outcomes. Before making a decision on any potential acquisition, carefully consider the implications and how it will affect patient care in order to maximize the benefits of cost savings.
