Journal of Rural Health Article: Clinical Outcomes and Profitability Following Rural Hospital Mergers and Acquisitions

November 25, 2024

Journal of Rural Health Article: Clinical Outcomes and Profitability Following Rural Hospital Mergers and Acquisitions

As US hospital markets become increasingly consolidated, empirical evidence is needed on the clinical and financial impacts of mergers on care provided by rural hospitals. This study identified characteristics of rural hospitals that underwent mergers or acquisitions and examined changes in profitability, clinical outcomes, and patient experience at acquired versus non-acquired rural hospitals.

Findings

Compared to non-acquired hospitals, acquired hospitals were more likely to be for-profit (18.6% vs. 4.6%, p<0.001) and tended to have lower total margins (-1.1% vs. 1.2%; p<0.05) despite higher average clinical volumes. Changes in acquired hospitals’ total margins, patient satisfaction, and risk-adjusted 30-day mortality rates were not different than changes among control hospitals. However, acquisition was associated with lower improvement in 30-day risk-adjusted readmission rates (0.58 percentage point [p.p.] difference in differences, 95% confidence interval -0.88 to -0.28 p.p., p<0.001).

Conclusions

Overall, mergers or acquisitions of rural hospitals were not associated with significant improvements in profitability, clinical outcomes, or patient experience. Policymakers may need to closely monitor rural hospital mergers in order to balance preserving access for rural patients with the consequences of health care consolidation.

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