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What are the benefits of hospital mergers?

What are the benefits of hospital mergers?

Mergers can offer financial stability for struggling hospitals through operational efficiencies associated with shared costs for expensive IT infrastructures and purchasing, access to a robust network of system resources, equipment and facility upgrades.

Do hospital mergers increase hospital efficiency?

The mergers involved 17 hospitals. Second, the effect of mergers was estimated through panel data analysis. Results: In general, the mergers showed no significant effect on technical efficiency and a significant negative effect of 2-2.8% on cost efficiency.

Do hospital mergers improve quality of care?

January 02, 2020 – Many hospitals and health systems tout the quality of care benefits of merger and acquisition deals. But a new study from researchers at Harvard University found that hospital acquisitions had little impact on key quality of care measures, including hospital readmission and mortality rates.

Why hospitals should not merge?

The Potential Drawbacks: With the benefits come the drawbacks, and the occurrence of hospital mergers may lead to price increases and less affordable care. Hospital mergers naturally gain a larger market share, in turn creating a macrocosm of higher costs toward health plans.

Why do hospitals merge together?

Many of the purported benefits of hospital mergers—including coordination of patient care, sharing information through electronic medical records, population health management, risk-based contracting, standardizing care, and joint purchasing—can often be achieved through alternative means that do not impair competition …

Why have so many hospitals merged?

What happens when a hospital merges with another hospital?

From the standpoint of consumers, hospital mergers may offer expanded access to health care services, but this may very well come at a cost — higher prices for those services and higher insurance premiums. So if a hospital merger happens in your area, be aware of what might be coming down the road. Commenting has been closed for this post.

What to learn from leaders who have merged or acquired hospitals?

Sometimes it is simply most helpful to hear from leaders who have been through these transactions speak on what they’ve learned. Here, three hospital and healthcare executives dispense advice, findings and lessons learned from their experiences in acquiring, merging or affiliating with other providers.

When do hospitals merge turning challenges into opportunities for it excellence?

WHEN HOSPITALS MERGE: TURNING CHALLENGES INTO OPPORTUNITIES FOR IT EXCELLENCE Jared Rhoads and James Kuhn When Hospitals Merge: Turning Challenges into Opportunities or IT Ecellence1 As many as 1,000 healthcare facilities are expected to undergo a merger or acquisition between 2013 and 2020.

Are there mergers and acquisitions in the healthcare industry?

Mergers and acquisitions (M&A) among hospitals and healthcare organizations have been on the rise for several years now. Deals between hospitals, physician medical groups, long-term care facilities, and home health providers abound, with activity levels high in the for-profit sector and the non-profit sector alike1.

Why do hospitals want to merge with other hospitals?

Hospital administrators who create the mergers tell one side of the story. They believe that hospital consolidation improves efficiency, access to care, and quality of care, and may lower costs because in theory, the more care a hospital provides, the more efficient and less expensive it should become.

How long does it take to realize cost savings from a hospital merger?

However, it may take some time for organizations to realize the cost savings stemming from a hospital merger and acquisition. The deals usually take two or more years to generate cost savings because operating revenue tends to decline at a higher rate than operating expenses at the start of a merger, Deloitte and HFMA reported.

Is there an instruction manual for hospital mergers?

There is no instruction manual when it comes to hospital mergers, acquisitions and affiliations. Sometimes it is simply most helpful to hear from leaders who have been through these transactions speak on what they’ve learned.

Is the Federal Trade Commission against hospital mergers?

In recent years the Federal Trade Commission has challenged several hospital and/or doctor practice mergers, and the courts have made the mergers “unwind” even after the merger has been completed.