More on Mergers & Acquisitions

How healthcare mergers and acquisitions may actually harm patient satisfaction

Clinical quality itself doesn't seem to suffer much, but patient perceptions can take a hit from market consolidation.

Jeff Lagasse, Associate Editor

Mergers and acquisitions have become the norm in healthcare, but they may negatively impact patient satisfaction and the perception of their care, a new study has found.

The good news for patients is that clinical quality itself doesn't seem to be affected one way or another by consolidation.

The Rice University Baker Institute of Public Policy research team expected that integrated hospital and physician groups would deliver better care coordination, but after looking at factors such as process care measures and readmissions rates, the group determined that simply wasn't the case.

It was in looking at 10 patient satisfaction measures that researchers found some differences.


Of the 10 patient satisfaction measures, six of them declined following a merger or acquisition of a hospital or physician group. The current working hypothesis is that such acquisition activity consolidates the market, resulting in decreased market competition between providers.

With a relative lack of competition, there's less pressure to keep patients satisfied, and providers are more likely to slacken their efforts in explaining medications to patients, for example, which was one of the 10 satisfaction measures considered.

In time that could translate to decreased clinical quality, especially if patients don't understand their care recommendations, or lack the knowledge to satisfactorily adhere to their medication plans.

For now, though, it's patient perceptions that are hurting, largely driven by non-clinical, external factors. Vertical integration improves quality for only a limited set of care processes, and that's more than offset by increased market concentration, the research found.

Because of that, the authors said regulators should continue to focus scrutiny on proposed hospital mergers, take steps to maintain competition and reduce barriers to entry.


The trend of mergers between large healthcare provider organizations continued in 2018, as the average size in revenue of sellers -- defined as the smaller of two organizations in a transaction -- reached $409 million, Kaufman Hall found in January.

This is the highest figure seen since Kaufman Hall began tracking this metric in 2008. It also represents a compound annual growth rate of almost 14 percent in the average size of sellers by revenue since 2008.

Twitter: @JELagasse

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