Healthcare DIVE September 27, 2024
Independent hospitals can receive efficiency and profitability boosts from acquisitions. However, buyouts don’t continue to boost operating metrics for corporate-owned hospitals.
Dive Brief:
- When independent hospitals are acquired by multi-hospital health systems, they experience boosts to profitability and efficiency, according to a new study published in the Journal of Political Economy Microeconomics this week.
- Acquired hospitals saw profitability increase by about $14 million per year, on increased consumer prices and cuts to nonclinical staff.
- However, when corporate-owned hospitals are acquired by other health systems, they do not experience similar efficiency gains, the study found, suggesting there is likely a limit to how much consolidation can benefit hospital performance.
Dive Insight:
Healthcare consolidation is growing in the...
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