Costs and Quality After Independent Hospitals Are Acquired by Health Systems
Independent hospital mergers with health systems have exposed consumers, employers, and other payers to higher prices without a commensurate increase in quality of or access to hospital care. Instead, quality and access generally declined, while hospitals realized cost savings, following acquisition.
Hospital acquisitions have consolidated care in fewer and larger health systems. From 2000 to 2020, the share of hospital beds that are part of health systems has risen from 58 percent to 81 percent nationally. A quarter of hospital markets no longer had any independent hospitals by 2020.
This brief presents the key findings from an analysis, conducted in partnership with researchers at the University of Pennsylvania, that compared independent hospitals that merged with a hospital system and hospitals that remained independent. It describes how prices, costs, and quality change when previously independent hospitals are acquired by systems. This study used claims data from commercial health plans in 20 states from 2012-2018.
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