The Health and Human Services Department released its first quarterly tranche of hospital and nursing home merger and acquisition transaction data, which marks a major step forward in the government's effort to track the impact of consolidation across the industry, policy experts said.
Hospitals with the lowest profit margins were sold more than twice as often as those with the highest profit margins, according to the analysis of 347 hospital transactions from 2016 to 2021. Long-term care hospitals changed ownership at substantially higher rates than other hospitals and more hospital transactions occurred in the South, where many for-profit chains are based.
The analysis, which is meant to serve as a sample of potential data threads to pull, confirms well-reported trends in hospital M&A. The findings were limited by self-reported data via the Provider Enrollment, Chain and Ownership System and a lack of information on the parent companies. It underscored the need for more comprehensive mandated reporting at both the state and federal level to better illustrate the buyer and parent companies, economists said.
But researchers can compare this dataset to others to glean how healthcare consolidation has impacted access, quality and costs.
"There's a lot of change of ownership in the hospital sector, and there has been no centrally updated database on this. It will be an important source of information and a great resource," said Martin Gaynor, a Carnegie Mellon University health economist. "There is a lot of potential here, but it is very important to get it right."