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How Has Hospital Consolidation Affected the Price and Quality of Hospital Care?
Published: February 2006
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A wave of hospital mergers and acquisitions in the 1990s transformed the inpatient hospital market. By 2003, almost 90 percent of people living in the nation's larger urban areas faced highly concentrated markets. Stakeholders and policy-makers have raised concerns about this consolidation trend, pointing to potential impacts on health care costs and quality. This synthesis analyzes the drivers of consolidation and evidence on how it has affected hospital prices, cost and quality.
Key Findings:
- A wave of hospital mergers and acquisitions in the 1990s transformed the inpatient hospital market.
- Consolidation raised hospital prices by at least 5 percent, produced modest cost savings for merging hospitals, and possibly resulted in lower quality.
- Another unchecked wave of hospital consolidation will likely result in higher prices and possibly lower quality.
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Charts, figures and photos
- Policy Brief Figure 1: Trends in hospital mergers and acquisitions, 1990-2003
- Policy Brief Figure 2: Changes in hospital consolidation by region
- Policy Brief Figure 3: Impact of consolidation on inpatient prices: Results from strong studies of three types
- Research Report Figure 1: Trends in hospital mergers and acquisitions, 1990-2003
- Research Report Figure 2: Changes in hospital consolidation by region
- Research Report Figure 3: HMO penetration in populous MSAs, 1990-2000
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Synthesis Project
The Synthesis Project is an initiative of the Robert Wood Johnson Foundation to produce user-friendly briefs and reports that synthesize research findings on perennial health policy questions. These products give policy-makers reliable information and new insights to inform complex policy decisions.
Learn more about Synthesis Project.