The Impact of Hospital Mergers and Acquisitions on Patient Experience and Health Outcomes

• Applicants: Dr. Esra Eren Bayindir; Professor Dr. Reinhard Busse; Professor Dr. Jonas Schreyögg
• Subject Area: Operations Management and Computer Science for Business Administration ; Public Health, Healthcare Research, Social and Occupational Medicine
• Term: since 2024
• Project identifier: Deutsche Forschungsgemeinschaft (DFG) - Project number 556603662

As a result of the measures taken by governments to limit and reduce the soaring health care expenditures, hospital markets in Germany have experienced a stream of consolidations. 10th Gesetz gegen Wettbewerbsbeschränkungen amendment, which came into effect in January 2021 and exempts mergers funded from the Hospital Structure Fund by the end of 2027 from the Bundeskartellamt’s merger control at the request of the respective state is expected to trigger a new wave of hospital consolidation. In theory, the impact of hospital mergers and acquisitions on quality of care is not clear. On the one hand, mergers and acquisitions may lead to quality improvement through volume-outcome effects or transfer of managerial or clinical expertise between merged or acquired and acquiring hospitals. On the other hand, quality may deteriorate as a result of mergers and acquisitions due to increased market power and lower competitive pressure to provide high quality care to attract patients. There is limited empirical work with inconclusive findings for the US and the impact of hospital mergers and acquisitions on quality of care in Germany has not been studied to the best of our knowledge. This project will examine the impact of hospital mergers and acquisitions on the quality of care, exploring a wide range of quality indicators covering patient experience and health outcome indicators for both elective (elective hip and knee replacement) and emergency conditions (acute myocardial infarction, appendectomy, and stroke). We will employ a difference-in-differences framework, comparing changes in the quality of acquired hospitals from pre-acquisition to post-acquisition with changes in the quality of hospitals with no change in ownership. We will use patient experience indicators from Weisse Liste from 2018-2023 and health outcome indicators from Wissenschaftliches Institut der AOK (WIdO) from 2004-2021. The long time frame will enable us to examine the longer term effects of mergers and acquisitions on different aspects of quality of care, which might not manifest themselves quickly. Given that it would be difficult to reverse market consolidation by regulation, the findings of this project will be paramount for guiding the states in their decisions to exempt the mergers and acquisitions from merger control and to assist Bundeskartellamt to thoroughly evaluate merger and acquisition applications.

• DFG Programme: Research Grants