In rural towns across the U.S. hospitals are in crisis. Since 2010, 121 rural hospitals have closed. And, the National Rural Health Association says more than one-third of all rural hospitals in the U.S. are at serious risk of shutting down. But not all hospitals are losing money. A series of mergers and acquisitions that began in the 1990’s has created massive hospital groups. Many of these hospital consortiums are turning huge profits every year by offering high priced services to well insured patients.
Are hospital mergers good for the general public welfare? Those wanting to make the deals often suggest that there will be an improved quality of care overall. Melanie Evans of the Wall Street Journal reports that this claim has not proven true:
The quality of care at hospitals acquired during a recent wave of deal making got worse or stayed the same, new research found, a blow to a frequently cited rationale for tie-ups.
Hospital merger-and-acquisition activity has surged in recent years, with executives involved in transactions making the case that greater size will boost quality with new investments and yield other improvements as deal makers benefit from each others’ strengths.