A systematic review of U.S. literature focused on analyzing the effects of mergers and acquisitions on healthcare suggests that there is a lack of evidence to support the theory that integration is an effective strategy for improving the value of care delivery, according to the study authors.
“In the last 30 years, consolidation of healthcare systems in the United States has accelerated through mergers and acquisitions,” Bhagwan Satiani, MD, and colleagues write in the Journal of the American College of Surgeons (JACS). “We completed a systematic literature review on integration to determine if its reputation for enhancing the value of healthcare by reducing price and cost/spending and improving overall quality of care is justified.”
The authors found that, in papers published from 1990–2024, neither horizontal integration (joining two or more hospitals) nor vertical integration (the merging of physicians and hospitals) has been found to result in “consistent and significant improvements in price, cost/spending, or quality associated with healthcare delivery.”
The authors screened 1,297 articles and identified 37 that met inclusion criteria. Results from any form of integration were mixed, they reported. Thirteen of 14 studies (93%) about price reported price increases. Thirteen of 16 (81%) about cost/spending showed cost increases or no change. Twenty of 26 studies (77%) about quality showed reductions or no change from integration.
“This finding represents an opportunity for healthcare leaders, including surgeons, to better define value in their efforts to improve quality while balancing the financial stability of the healthcare industry with a focus on benefiting the patient,” Satiani and colleagues conclude.
Satiani, professor of surgery emeritus at The Ohio State University College of Medicine, Columbus, Ohio, and a Vascular Specialist associate editor, writes frequently for this publication on the topics of hospital administration and how healthcare is delivered.
In a column published in the July edition entitled “Beyond private equity: A new sheriff in town,” Satiani explored the entrance of insurance companies into the physician practice acquisition market.
“When hospitals—which have integrated horizontally, vertically and every which way to consolidate and hire thousands of physicians— complain about the insurance companies buying physician practices, we better pay attention,” he wrote.
“Insurers like UnitedHealth Group now employ not only more physicians than the health systems, but they also own data analytic centers, accountable care organizations, office-based labs (OBLs), pharmacy benefit managers, urgent care centers, nursing homes, behavioral and mental health centers, and nursing schools.
“A recent example is the large acquisition of Wisconsin-based ProHealth Care, armed with 800 employees to manage the revenue cycle, information technology and data analytics. The strategy is to build out the back office to support the workers. Amazon-like, isn’t it? A particular concern with insurer-owned physician practices that are dominant in certain markets is their poor record related to passing on any savings to employers and ultimately patients.”
In the article, Satiani pondered what might be ahead “It is possible we may have three or four vertically and horizontally integrated for-profit juggernauts serving the entire healthcare supply chain or a single payor system,” he considered.
“It is like the Wild West and Dodge City right now. Is it possible for physicians to ‘get outta Dodge’ and escape from this scenario? Is it possible that we will see a repeat of the hospital acquisitions of the 1980s and the accompanying financial disaster?”
