How do hospitals do in the early years after being acquired?

In this white paper, Deloitte analyzes the financial performance of 101 acute care hospitals that were acquired in 2007 and 2008, comparing them based on whether they were acquired by national versus regional/local health systems and also comparing them with peer hospitals.  The study found that being acquired had a positive effect on the hospitals — their performance improved more than peer group hospitals.  Despite this, the performance of the acquired hospitals was still below that of the peer group.  The study also found that from the standpoint of financial and operational performance, the hospitals acquired by national health systems did better than those acquired by regional/local health systems.

Why do I like this study?  Nostalgia, for one thing.  Back in the day, I was the librarian for a hospital consulting firm and I remember the partners working up a similar article.  It was a case study of the financial outcome of two hospital consolidations.  Secondly, this new white paper is data rich.  Finally, it is from an authoritative source.

Source: Hospital Consolidation: Analysis of Acute Sector M&A Activities, 2013.  Click here: http://www.deloitte.com and then type in “hospital consolidation” in the search box in the upper right corner.  The “back in the day” article that I mentioned is: Briggs, F.R., Frommelt, J.J., and Roth, J.H.  How hospital consolidations affect revenues.  Topics in Health Care Financing;8(1):21-37, Fall 1981.  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org