Hospital consolidation and quality: Opening the behavioral black box

Area of Science:

• Health Economics
• Healthcare Management
• Health Services Research

Background:

• The impact of hospital consolidation on quality remains less understood than its effects on price and cost.
• Quality improvements are frequently cited as a primary justification for hospital mergers by proponents.
• Existing research offers limited evidence supporting claims of enhanced quality following hospital consolidation.

Purpose of the Study:

• To develop a conceptual model examining the conditions and motivations for quality improvement actions post-hospital consolidation.
• To analyze factors that might predict quality-enhancing actions after mergers.
• To explore alternative models of hospital objectives beyond profit maximization.

Main Methods:

• Development of a two-part conceptual model.
• Review of over three decades of research on hospital consolidation and quality.
• Analysis of specific circumstances potentially leading to quality improvements post-merger.

Main Results:

• Little empirical evidence supports the claim that hospital consolidation leads to improved quality.
• Analysis of four sets of circumstances showed minimal evidence of quality-improving actions following mergers.
• The study contrasts profit-maximizing objectives with utility-maximizing nonprofit objectives for financial surplus allocation.

Conclusions:

• Hospital consolidation does not consistently lead to improved quality outcomes.
• Further research is needed to understand nonprofit hospital objectives and their impact on quality investment post-consolidation.
• The findings challenge the common justification of quality improvement for hospital mergers.