The debate over hospital mergers and acquisitions is too narrowly focused on commercial insurance pricing, overlooking how deals — and blocked deals — affect the majority of hospital patients, according to the American Hospital Association, citing a new report from Kaufman Hall.
The report, “A New Approach to Hospital Mergers & Acquisitions: Supporting Healthy, Competitive Hospital Markets,” argues that antitrust reviewers and policymakers should weigh the full range of consequences of hospital consolidation. Kaufman Hall published the report in September at AHA’s request.
In a Sept. 14 AHA News blog post, Chad Golder, AHA’s senior vice president, general counsel and secretary, wrote that a “comprehensive analysis of hospital M&A transactions — one that considers impacts on all patients served” is needed, since “none of these patients is likely to experience any pricing impacts from hospital M&A transactions.”
Four things to know:
1. Nearly 60% of acute-care hospital patient days are attributable to Medicare, Medicaid or Medicare Advantage patients, populations that are largely unaffected by the commercial pricing changes antitrust reviews tend to focus on, according to the report.
2. Among 88 hospital transactions that were canceled, target hospitals saw their operating profit margins fall by a median of 50% and their days cash on hand drop by a median of 38% within a year of the deal’s collapse, the report found.
3. An analysis of 221 counties with only two short-term acute-care hospitals found the hospitals often had different service line portfolios rather than directly competing for the same patients, according to the report.
4. Target hospitals in challenged deals tended to serve communities with greater vulnerability than the hospitals seeking to acquire them and than national averages, the report found.
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