Hospitals Industrial Organization Quality

Impact of hospital mergers on quality: a case study

There is mixed evidence about whether hospital mergers improve quality. On the one hand, economies of scale could lead to more investment in information technology, or allow for further specialization of services. A recent paper by Wang et al. (2022) investigates the impact of a recent hospital merger on quality in New York. The merging hospitals were described as follows:

NYU Langone Health (NYULH) is an urban academic medical system. Before the merger, NYULH consisted of a multispecialty academic acute care hospital (450 beds) and a specialized orthopedic, rheumatic, and neurologic treatment and rehabilitation hospital (190 beds). Lutheran Medical Center (450 beds)was a teaching hospital located near preexisting NYULH outpatient sites. Most individuals in its catchment area were Medicaid or Medicare beneficiaries or uninsured, representing the densest noncommercial payor communities for nonpublic hospitals in the country. Before the merger, funding was lacking for technology and infrastructure investments to support quality improvement. As a result, there was variation from standard clinical practice, such as sending patients for elective procedures through the emergency department. Outcome metrics (eg, mortality rates) were poor. In January 2016, NYULH completed a full asset merger with Lutheran, later renamed NYU Langone Hospital–Brooklyn (NYULHB)…

What happened after the merger? The authors use data from Hospital Compare, and track a variety of outcomes including: in-hospital mortality, 30-day same hospital readmissions, hospital acquired conditions (HACs), and patient experience as measured in the Hospital Consumer Assessment of Healthcare, Providers, and Systems (HCAHPS) survey. HACs included catheter-associated urinary tract infections [CAUTIs] and central line-associated bloodstream infections [CLABSIs]. To account for changes in patient mix, the authors control for patient demographics, insurance type, DRG mix, and Elixhauser comorbidities. Based on this approach, they found:

There was a 0.71% (95%CI, 0.57%-0.86%) absolute (27% relative) reduction in the crude mortality rate and 0.95%(95%CI, 0.83%-1.12%) absolute (33% relative) in the adjusted rate by the end of the 3-year intervention period. There was no significant improvement in readmission rates after accounting for baseline trends. There were fewer central line infections per 1000 catheter days, fewer catheter-associated urinary tract infections per 1000 discharges, and a higher likelihood of patients recommending the hospital or ranking it 9 or 10.

How were these quality improvement achieved? They list four key initiatives:

  • Integrating administrative and clinical leadership. The hospitals reduced contracting of physicians to rely on a more full-time employment based model and expanded service lines. Gradual medical programs were consolidated.
  • Information technology. The merger lead to the adoption of a comprehensive EHR and cost accounting system, with easy to use dashboards.
  • Local ownership of quality metrics. Each local center had quality metric targets.
  • Value-based analytic-driven interventions. Value-based, analytic-driven initiatives from NYULH were introduced at NYULHB, including EHR embedded-decision support systems.

A couple of items to note. First, outcomes at the acquired hospital premerger were below average; it is unclear whether these quality results could be replicated if two-above average hospitals merger. Second, there was a targeted intervention to improve IT and quality reporting. Thus, one could be concerned that much of the quality gain was due to better reporting. However, we see in-hospital mortality decline which (one would hope) shouldn’t be impact by better IT systems since mortality data is already well-recorded at all hospitals.

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