Mergers and acquisitions can help health systems and hospitals achieve scale and improve finances, but a new JAMA report found consolidation may risk hurting patient safety.
M&A, institutional affiliations and single service agreements can create safety risks connected to changes in patient populations, infrastructure and clinician practice settings, according to study authors Susan Haas, Atul Gawande and Mark Reynolds.
“Institutions must actively plan for, monitor and manage the resulting risks as part of a comprehensive strategy, including sharing data on quality and safety and sharing oversight of care for the joint patient population,” they wrote.
Healthcare M&A activity remains hot, especially as health systems and hospitals search for ways to remain competitive with lower reimbursements and inpatient traffic shifting to alternative venues.
The new JAMA report warns that health systems face possible challenges to patient care following consolidations.
A merger or acquisition means new patients, which can mean more visits, as well as potentially unfamiliar patient populations. For instance, an acquisition could result in an influx of non-English-speaking patients who require interpreters. That could result in the health system needing to connect with new community organizations.
“Lack of wider institutional attention to specialized needs can result in serious deficiencies in provision of safe, timely care,” the report said. Health systems may also need to take into account unfamiliar infrastructure and new settings for physicians.
The study authors said another issue with mergers, acquisitions and affiliations is who is leading them. They’re often led by experts in finances — not patient safety, the authors wrote.
“Goals and responsibility for safety and quality are frequently unclear. As a result, risks to patients arise at the ‘sharp end’ of care, where clinicians are asked to practice in new settings, with new populations or with new infrastructure, without sufficient planning,” they wrote.
What’s a health system to do? The study authors suggested a patient safety toolkit to “support clinical planning between institutions prior to launch.” The kit should include information about differences in infrastructure and resources, as well as a checklist for creating a joint clinical integration council.
Much has been written about healthcare M&A and how companies are increasingly turning to consolidation and purchases as a way to thrive, or even just survive, in the current environment.
Another recent report pointed to a different potential downside as it showed that M&A is leading to higher prices in California. The University of California, Berkeley study said highly concentrated markets in the state are causing higher prices for hospitals, physician services and Affordable Care Act premiums, especially in northern California.
Northern California, which is “considerably more concentrated” than the southern part of the state, had inpatient prices 70% higher and outpatient prices between 17% and 55% higher compared to southern California in 2014. ACA premiums were also 35% higher in northern California in 2016.
Another issue cited in a 2017 report was that savings from M&A deals are not going back into staff training or improved wages. Instead, the Center for Economic and Policy Research said, savings are helping healthcare organizations’ finances.