Does Mission Health have a future without merger?
Ron Paulus, Mission Health's president and CEO, says he and the hospital's 19-member board concluded last year that the future of Mission Health was iffy at best without a merger.
Do hospital mergers help or hurt nonprofit hospitals?
But research shows the price of care, especially for low-income patients, usually rises when a hospital joins a for-profit corporation. Proponents of hospital mergers say the change can help struggling nonprofit hospitals "thrive," with an infusion of cash to invest in updated technology and top clinical staff.
Why do health system mergers and acquisitions lead to service cuts?
He said cuts following a health system acquisition stem from changes in the market — such as the appearance of a competing provider — and tend to occur when a service is unneeded.
How do hospital mergers affect staff job satisfaction?
One study found that “hospital mergers have a small, transient positive impact on staff job satisfaction in the year immediately before and after merger approval. Continuous staff support and management of staff expectations throughout a merger may help increase staff job satisfaction during the challenging period of merger.”
How do hospital mergers affect patients?
Mergers and acquisitions can negatively affect clinician morale as well. Some argue they lead to providers' loss of autonomy and increase the emphasis on financial targets rather than patient care. They can also contribute to burnout and feeling unsupported.
How will consolidation between hospitals affect Medicare spending?
Horizontal consolidation does not impact Medicare prices for physicians or hospitals that are generally paid based on the prospective payment systems.
Are hospital mergers good for patients?
Changes in Quality of Care In other words, most data shows mergers do not improve clinical quality; it remains neutral or deteriorates. While many healthcare transactions promise better care coordination and improved access to services, there is little evidence that consolidation enhances care quality.
What happens when two hospitals merge?
When individual hospitals merge into larger systems, they gain a larger share of the consumer health market. That puts them in a position to ask health insurance companies to pay more for medical care and procedures. These higher prices are not borne by the insurers, but by consumers in the form of greater premiums.
Who benefits from hospital mergers?
Many of the purported benefits of hospital mergers—including coordination of patient care, sharing information through electronic medical records, population health management, risk-based contracting, standardizing care, and joint purchasing—can often be achieved through alternative means that do not impair competition ...
Why is healthcare consolidation bad?
Everyday Americans bear the brunt of hospital consolidation. Hospitals in highly concentrated markets can charge higher prices for medical services and have greater leverage to negotiate higher prices from health insurance providers, leading to ever-increasing health care costs for individuals and families.
Do hospital mergers reduce costs?
On average, acquired hospitals realize cost savings between 4 and 7 percent in the years following the acquisition. These results are robust to a variety of different control strategies, and do not appear to be easily explained by post-merger changes in service and/or patient mix.
Is there any evidence that hospital mergers benefit the hospitals their patients or society?
We found that an acquisition is associated with a decrease of 3.5% in net patient revenue per adjusted admission … suggesting the savings are passed on to patients and their health plans. And we found that mergers lead to a decrease in both readmissions and mortality for patients.
What are the main two reasons for hospitals to merge?
Here are five reasons why a hospital system merger should be seen as a good thing for the public and for patients.Access to Capital and Resources. ... Reduced Costs. ... Standardization of Clinical Protocols. ... Better Access to Care. ... Improved Efficiency.
When hospitals merge patients often pay more?
Patients wind up paying more But patients rarely reap the rewards of lower insurance premiums or out-of-pocket expenses when mergers occur. Hartford executives talk about reducing the total cost of care in the same breath that they discuss the need to charge insurers more.
Is hospital consolidation good?
Physician-hospital consolidation has not led to either improved quality or reduced costs. Studies find that consolidation was primarily for the purpose of enhanced bargaining power with payers, and hence did not lead to true integration. Consolidation without integration does not lead to enhanced performance.
How long do hospital mergers take?
Market estimates place a merger's timeframe for completion between six months to several years. In some instances, it may take only a few months to finalize the entire merger process. However, if there is a broad range of variables and approval hurdles, the merger process can be elongated to a much longer period.
Tables
Table 2: Alternative Specifications for Operating Expense and Net Revenue per Adjusted Admission
I. Introduction
In 2017 and 2019 we conducted analyses of the effects of hospital acquisitions on hospitals’ costs and quality of care. Our research, which included both structured interviews with hospital leaders and econometric analysis, found that hospital acquisitions can generate substantial benefits.
II. Quantitative Analyses of the Cost and Quality Effects of Hospital Acquistions
We follow the methods of our previous research to update our empirical analyses of the cost and quality effects of hospital acquisitions.
III. Data Description
We track hospital acquisitions by identifying changes in a hospital’s affiliation as reported in the American Hospital Association (AHA) Annual Survey Data, as well as identifying changes in hospitals’ affiliations noted in the accompanying documentation.
IV. Measuring the Effects of Hospital Acquisitions
As in our previous studies, we use a “difference-in-differences” method to measure the effect of hospital acquisitions on cost, quality, and revenue.
V. Results and Discussion
Consistent with our previous findings, we find that hospital acquisitions are associated with statistically significant decreases in both cost and revenue. Specifically, our updated estimates show that an acquisition is associated with a statistically significant decrease in operating expense per adjusted admission of 3.3 percent.
VI. Conclusion
During the two rounds of interviews summarized in our previous studies, hospital leaders described their hospitals’ efforts to deliver higher quality care in a more cost-effective manner.
How does merger affect hospitals?
Hospital mergers and acquisitions may affect availability and delivery of services as hospitals and health systems work toward increased efficiency in cost control. When efficiency is the goal, employees may become redundant and threat of layoffs might exist. All of these factors have an effect on the community, from lost jobs, to lost revenue, ...
How long does it take to merge hospitals?
Most hospital mergers and acquisitions can take a considerable amount of time to be completed. This length of time may range from 4 to 6 months up to several years , as there are several steps to be completed successfully by two health care systems before they can be legally combined into a single entity.
Why do mergers and acquisitions drive health care costs through the roof?
Therefore, economists argue, that merger and acquisition deals drive health care costs through the roof and place more financial burden to patients.
Why do hospitals consolidate?
According to them, hospital consolidation helps improve efficiency, quality, and access to health care. In theory, it can also potentially lower costs because the more care or services a hospital can provide, the more efficient and much cheaper it should become.
What are the benefits of a smaller hospital?
For instance, when small hospitals merge with larger, more equipped hospital systems, patients at the smaller hospital may benefit from better access to health care technologies, like electronic medical record systems and high tech imaging procedures.
Do mergers and acquisitions lower patient care?
However, they almost never do. In fact, a number of studies have shown that hospital mergers and acquisitions led to higher prices, and did not improve patient care, or reduce costs. Continue reading as we get in depth about these deals, ...
Does merger and acquisition increase inpatient mortality?
In fact, a 2011 Congressional Budget Office working paper found that merger and acquisition deals increase intensity of treatment while additionally increasing inpatient mortality in heart disease patients. Hospital concentration also tends to reduce quality of care for some medical procedures.
Who is the CEO of Mission Health?
Ron Paulus, Mission Health's president and CEO, says he and the hospital's 19-member board concluded last year that the future of Mission Health was iffy at best without a merger.
How many hospitals did for profit companies buy in 2017?
In 2017, 29 for-profit companies bought 18 for-profit hospitals and 11 not-for-profits, according to an analysis for Kaiser Health News by Irving Levin Associates.
How many hospitals does HCA own?
HCA owns 178 hospitals in 20 states and the United Kingdom. Mergers solve some problems for hospitals, but they don't make health care less expensive or better. In fact, prices usually go up.". Martin Gaynor, health care economist, Carnegie Mellon University.
What hospital did Remine go to?
She was in Mission Health's main hospital in Asheville for three weeks last fall with kidney failure. And, from 2006 to 2008, a Mission Health-supported program called Project Access provided ReMine with free care after she lost her job because of illness. After 130 years as a nonprofit with deep roots in the community, ...
What percentage of hospital operating expenses are reduced by consolidation?
In September 2019, AHA released a report in which Charles River consultants concluded that the increased scale of operations resulting from hospital consolidation allowed for an estimated 2.3% reduction in annual operating expenses.
How many hospital transactions will there be in 2020?
The number of announced hospital transactions for 2020 was 79, surpassing the 74 reported for 2010, but marking a drop from 92 in 2019, according to a tally kept by Kaufman Hall, a merger consultancy based in Chicago. However, the average size of each transaction increased – with the seller size by revenue averaging more $800 million in ...
What is a MedPAC report?
A 2020 report from the Medicare Payment Advisory Commission (MedPAC) can be a good resource for reporters new to this topic. Like journalists, lawmakers often get conflicting views about issues from different parties. MedPAC serves as a kind of on-call research firm for Congress.
What did MedPAC staff look at?
The MedPAC staff looked as well at FTC’s reports. MedPAC’s extensive review included some of the works that the AHA had challenged in its press releases.
How many articles did MedPAC review?
The MedPAC staff also examined more than two dozen articles published in economic and medical journals, including studies that had gone through peer review. (This means the journal asks other experts in the field to review the study before publication and offer comments and criticisms.)
What is MedPAC in Congress?
MedPAC serves as a kind of on-call research firm for Congress. Due to MedPAC’s expertise, members of Congress sometimes order the commission to weigh in on the arguments being made in disputes on health policy, even on matters beyond Medicare’s payment rates. In August 2018, the House Energy and Commerce Committee tasked MedPAC with reviewing ...
What is HCCI hospital concentration index?
HCCI’s Hospital Concentration Index offers a granular look at regions, while providing important context about variation seen in the United States in terms of hospital competition.
Health systems and hospitals are under several pressures to increase their scale, Kaufman Hall report says
A new report prepared at the request of the American Hospital Association (AHA) finds that there are several benefits generated from hospital mergers, acquisitions, and partnerships.
Addressing financial struggles
A significant percentage of hospitals involved in merger, acquisition, and partnership transactions face financial peril, the new report says.
KEY TAKEAWAYS
At health systems and hospitals, pressures to increase scale include assuming risk in value-based contracts, which requires a large enough patient population to diversify risk.
How much money did Mission Health give to HCA?
Lindell said Mission Health provided about $100 million more in their first full year under HCA's policy in charity care, uninsured discounts and other financial assistance, a total of about $252 million in the first full year of HCA operation.
Who bought Mission Health?
Nashville-based conglomerate HCA purchased Mission Health for $1.5 billion in a deal approved by state attorney general Josh Stein. Prior to its execution, Stein negotiated 15 commitments to hold HCA to terms of the deal, which included a requirement that certain services continue to be offered at Mission's rural hospitals for at least 10 years.
When did HCA Healthcare buy the Six Hospital System?
He has watched from nearby as the six-hospital system experiences growing pains after being purchased by for-profit hospital giant HCA Healthcare in February 2019.
I. Introduction
III. Data Description
- A. Hospital Transaction Data
We track hospital acquisitions by identifying changes in a hospital’s affiliation as reported in the American Hospital Association (AHA) Annual Survey Data, as well as identifying changes in hospitals’ affiliations noted in the accompanying documentation. For each hospital transaction i… - B. Cost and Revenue Data
We use hospital cost and revenue data from the Centers for Medicare and Medicaid Services’ (CMS) Healthcare Cost Report Information System (HCRIS). The HCRIS database contains annual financial reports that all hospitals participating in the Medicare program must file. We measure …
IV. Measuring The Effects of Hospital Acquisitions
- As in our previous studies, we use a “difference-in-differences” method to measure the effect of hospital acquisitions on cost, quality, and revenue. Using this approach, we compare changes in cost, revenue, and quality at acquired hospitals to changes in those same measures at similar control hospitals not involved in an acquisition between 2009 and 2019. In so doing, we assume …
v. Results and Discussion
- A. Revenue and Cost Findings
Consistent with our previous findings, we find that hospital acquisitions are associated with statistically significant decreases in both cost and revenue. Specifically, our updated estimates show that an acquisition is associated with a statistically significant decrease in operating expe… - B. Quality Findings
As with our 2019 study, our updated results show that acquisitions are associated with statistically significant improvements in quality measured as decreases in the overall outcome composite index (where a negative estimate indicates improved quality) and the 30-day readmis…
VI. Conclusion
- During the two rounds of interviews summarized in our previous studies, hospital leaders described their hospitals’ efforts to deliver higher quality care in a more cost-effective manner. Two frequently cited factors in achieving this goal were increased scale and the establishment of more standard processes of care, both of which are facilitated by acquisitions. With these factor…