Hospital Mergers Fail to Deliver Better Care or Lower Costs, Study Finds

The widespread consolidation of American hospitals has failed to deliver on promises of improved care and reduced costs, according to a comprehensive new study that challenges conventional wisdom about healthcare mergers.

The systematic review, published in the Journal of the American College of Surgeons, examined three decades of research on hospital integration, finding that mergers typically led to higher prices without meaningful improvements in care quality.

“Proponents of health care integration have claimed it controls costs and enhances care quality,” explains lead author Bhagwan Satiani, MD, from The Ohio State University Wexner Medical Center. “But we found that evidence is lacking that integration alone is an effective strategy for improving the value of health care delivery.”

The findings come at a critical time, with nearly 70% of U.S. hospitals now affiliated with larger health systems. After analyzing 37 qualifying studies from 1990-2024, researchers found troubling patterns:

• 93% of studies showed price increases following mergers
• 81% reported higher costs or no change in spending
• 77% found reduced quality of care or no improvement

Among all studies examined, only 22% showed positive overall impact from healthcare integration, while 54% demonstrated worse outcomes.

These results carry particular weight for surgical services, which account for approximately one-third of U.S. healthcare expenditures. Rather than pursuing mergers alone, Satiani suggests healthcare leaders should focus on targeted quality improvement initiatives and standardized metrics.

The research team screened nearly 1,300 studies examining both horizontal integration (hospital-to-hospital mergers) and vertical integration (hospitals acquiring physician practices). Their systematic approach aimed to minimize bias while evaluating impacts on quality, price, and spending.

“These findings provide an opportunity to better define value with a focus on benefiting patients while balancing the financial stability of the health care industry,” Satiani notes.

The study authors recommend that healthcare organizations invest more strategically in quality improvement infrastructure rather than relying on mergers to drive enhanced performance.