Hospitals Tout Merger Cost Savings, Contradicting Past Studies

Hospital operating costs fell and patient care improved following mergers and acquisitions, according to a new report contradicting prevailing research about the effects of hospital consolidation.

The Sept. 4 report, commissioned by the American Hospital Association, analyzed hospital mergers from 2009 to 2017. It found that annual operating costs at acquired hospitals fell 2.3% while revenues per admission fell 3.5% compared to non-merging hospitals.

That suggests savings from “merging hospitals are passed on to patients and their health plans,” according to the report, which is an updated version of a 2017 report prepared by economists from Charles River Associates.

“Mergers ...