The Effects of Hospital Consolidation on the Quality of Care Provided

Abstract

As hospitals continue to undergo consolidation at a rapid pace, the quality of care provided to patients may change due to this alteration of the health care landscape. I use data from the American Hospitals Association (AHA) of over 2,400 hospitals across the United States and quality of care data from the Centers for Medicare & Medicaid Services (CMS) from 2008 to 2016 to estimate the effects of consolidation on the quality of care provided. I categorize consolidation into hospital system acquisitions and independent hospital mergers as defined by Dranove and Lindrooth (2003). I look at three types of indicators of quality of care: (1) mortality and readmission rates, (2) patient satisfaction, and (3) timely and effective care. Difference-in-Differences estimates initially suggest a very small, negative effect on the quality of care from system acquisitions and no significant effect from independent hospital mergers after having looked at a variety of indicators. I conclude after analyzing leads and lags of effects that there is no significant effect on the overall quality of care provided to patients from both types of hospital consolidation.