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AHA finds hospital proximity matters in reaping merger benefits

Mergers of hospitals located closer together generally drive greater cost reductions, according to an updated study from the American Hospital Association. 

When acquired hospitals are nearby the acquiring system — within 30 miles or less — the AHA found expense per adjusted admission declined 2.8 percent compared to nonmerging hospitals with similar characteristics. For merging hospitals that are further apart, the AHA study finds the decline in expense is 1.5 percent, but not statistically significant. 

The previous version of the AHA study did not take proximity into effect. It found mergers in general were associated with a 2.5 percent reduction in operating expense per admission, with average merger-related annual savings of $5.8 million. 

The studies also examined the effect of mergers on quality, but quality data was inconclusive in both studies. 

Read more here


More articles on transactions and valuation:

Baylor Scott & White, Memorial Hermann to keep regional brands after merger: 'Spending millions taking signs off buildings doesn't improve healthcare'
Dignity Health, CHI push back merger date
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