Hospital Patients Have Lower Costs at Independent Facilities, Study Finds
Patients in managed care plans who are treated at hospitals that have consolidated into large hospital systems pay an average of $103 more per day for care than patients at independent hospitals, but the level of patient care is roughly equal, according to a study published in the January/February issue of Health Affairs, the AP/Las Vegas Sun reports.
The study, led by Alison Cuellar of the Mailman School of Public Health at Columbia University and University of California-Berkeley professor Paul Gertler, analyzed data from 300 hospitals in Arizona, Florida, Massachusetts and Wisconsin. Researchers compared financial and patient data from 1995 to 2000 in hospitals that merged and those that remained independent.
According to the study, more than half of the nation's hospitals are part of larger hospital systems. Mergers and acquisitions reached a high of 310 hospitals in 1997 and declined to 101 in 2002, the study found. For-profit urban hospitals were most likely to join systems, according to the study.
Researchers also found that although the level of care was comparable at independent hospitals and facilities that were part of a hospital chain, per-patient spending was higher at hospitals that were part of a system. The report concludes, "This analysis suggests that consumers were worse off as a result of hospital consolidations."
Caroline Steinberg, vice president of trends and analysis for the American Hospital Association, said the report did not address all of the motivating factors for hospital consolidations, adding, "For a lot of hospitals it is really a matter of survival. Often there is a benefit to the community if these hospitals can stay open" (Manning, AP/Las Vegas Sun, 1/11).
An abstract of the study is available online.
"Prices for just about everything medical are continuing to rise faster than everything else, with little or no evidence of improvements in quality," Washington Post columnist Steven Pearlstein writes, adding, "Instead, our reward seems to be the creation of local and national oligopolies characterized by less competition, less choice, higher prices and higher returns to shareholders."
Pearlstein writes that "one result of all this consolidation is that it has reduced the chance of a new entrant coming along to shake things up with a new technology or business model," adding, "In a world where giants deal only with giants, that's not likely" (Pearlstein, Washington Post, 1/12).