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Quality and Hospital Horizontal and Vertical Consolidation

By February 21, 2019Commentary

As it has become apparent from research that hospital consolidation and hospital acquisitions of physician practices is a major driver, no, make that the major driver, of health spending growth, health systems have responded in part by trying to claim that all this acquiring and consolidation improves coordination of care and quality; a claim which also has no support in the research literature, as shown again by a recent medicare Care Research and Review article.   (Medical Care Article)   The authors looked at 29 CMS quality measures from 2008 to 2015 to see if either hospital consolidation or hospital acquisition of physician practices had an effect on outcomes.  We all know that hospitals have merged at what should be an alarming rate and most metropolitan areas now have markets that are not in any manner competitive.  At the same time, these mammoth health systems now employ about 50% of all physicians.  So did all this activity do anything to improve quality, at least as measured on these commonly reported dimensions.  The researchers focussed on readmissions and on processes of care that most closely might affect actual outcomes, as well as patient satisfaction measures.  Data from the CMS Hospital Compare website was used, along with data from several sources indicating the level of concentration in the hospital market and whether the physician was independent or not.

Vertical and horizontal consolidation increased significantly over the study period.  In general process adherence scores and patient satisfaction were higher at the end of the period than at the start, and readmissions were lower.  Across different levels of hospital/physician integration, including no relationship, scores tend to be the same for process measures, readmission rates and patient satisfaction.  A closer analysis found that on only two measures was there even a slight indication that employing physicians was related to better performance; use of beta blockers and pneumonia readmissions.  Market concentration appears to have a positive effect only on the beta blocker use measure.  It had a clear negative relationship with patient satisfaction.  But, hey, if you don’t have to worry about losing a patient to a competitor, why bother to keep them happy.  It is pretty apparent that allowing ever more gargantuan health systems isn’t doing anything to improve quality, nor is there any logical reason why it would.  So this is great, lets just keep going on this path, spending more and getting worse care.  Or, as I have suggested before, maybe we stop this nonsense and even reverse it, break up the health systems and forbid hospitals from acquiring physician practices.

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