J|Insights: Unmet expectations: Quality & patient experience after a merger

Last week, the New England Journal of Medicine published a paper showing that hospital mergers don’t do much to change several key metrics in quality and experience.

And in the one place where the numbers do change – patient experience – they’re slightly worse. Under normal circumstances a paper showing little to no change in the key outcomes studied wouldn’t get much attention. The problem here is that hospitals have long touted these metrics as reasons for a merger. It’s more about the unfulfilled expectations – set by hospitals themselves – that made it a story. Here, our CEO, David Jarrard, explains what’s going on and what healthcare leaders can do to make sure it doesn’t happen in the future.

For more on  this story, be sure to read Melanie Evan’s coverage in the Wall Street Journal.

You can listen to the conversation or read the transcript below.

Read the transcript

David Jarrard: When I look at studies like the one in The New England Journal of Medicine, there’s serious research by some clinicians who really care about healthcare and how it’s developed and the best way to do it. But they’re using the data that’s available to them, and even that is limited. It tells a limited story. There’s much more to it that’s going on with mergers and acquisitions. That is on the healthcare leaders to talk about. There’s a story to tell that is often missed when we talk about mergers and acquisitions. One of the reactions I had is that the physicians conducting the research looked at the available data, I think from 2009 to 2012 or 13, just for a few years. And whether there was a marked benefit in those numbers as a result of a merger, particularly given that so many of these mergers touted quality of care as the reason for the merger.

David Shifrin: Potentially reduction in price as well.

DJ: And potentially reduction in price. And then they measure that over a four year period. But we all know, all of us who work in the hospital industry know that four years is an incredibly short amount of time to make a significant strategic change, particularly in the kinds of organizations that we’re talking about. But also, often some of the greatest benefits of mergers and acquisitions are not necessarily that the quality is going to be dramatically improved. The quality is going to continue to exist. I mean, so often, with mergers the true value is that healthcare is able to continue in places where otherwise it wouldn’t.

Sometimes in healthcare there’s a reticence to tell that story because we’re polite to each other. If we’re in a merger and acquisition, the selling organization or partnering organization doesn’t want to say, ‘We’re in such financial straits that we have no other choice but to do this or we would close or we’d have to dramatically redefine ourselves. So the better option is to find a great partner, join them and continue to do what we do, continue to fulfill our mission.’

Sometimes the true goal of a merger is the continued existence of the organization that’s merging or partnering. So we should do the things that the researchers were talking about, which is looking at quality and looking at price and continue to look at access. But I also think we have to look at the continuation of care, period. And it’s hard to look at from a data set that’s reported to the government on an annual basis.

Now, a challenge is that as organizations are merging or coming together, they tell a story about why that’s happening. Right? And quality’s an easy go-to message because everybody wants to quality of care to be good and for it to be improved. But if we’re looking at sort of the long-term impact of a merger, as a leader at the very beginning, I’ve got to tell a better story about what we’re doing and why we’re doing it to continue to access to care. While it may not have been a key part of messages in the past, it has got to be part of the key messages in the future.

DS: Because that really seems to be the biggest, the source of the biggest buzz around this particular study. Because the numbers themselves didn’t change that much. The only one that really changed was patient experience, which appears to have dropped a little bit. Not enormously, but a little bit, and that’s not great. It seems like that was concentrated among organizations that already had lower patient experience numbers.

But otherwise the numbers were pretty steady or they couldn’t really tell a difference. So the issue is that the story that had been told was, or at least what people assumed was, ‘everything is going to get better. We’re going to go from a six to eight. And instead it’s, ‘We’re going to maintain a six instead of dropping into a zero.’

DJ: Yes. And the data that’s being collected is very specific about what being measured. And you can look at HCAHPS and decide from that some kind of patient experience. But patient experience itself is delivered through an entire universe of experiences patients have with an organization, which may or may not be improved by a merger.

So it’s very subjective, I think it’s a very soft metric. And quality that’s measured through data that the government collects is extremely valuable to an organization. But it’s not the only quality measurement that exists.

DS: Thirty day re-admissions. They were steady. They weren’t worse. They weren’t better. But that’s another quality metric.

DJ: But they continue to be. And I don’t mean to say that the survivability of a hospital is the only reason that mergers happen. There’s a number of other reasons, but it’s a fair point that hospital leaders can set themselves up for exactly this kind of criticism by saying at the beginning that this is the only reason that the merger is going to happen. There’s a variety of factors that go into why an acquisition is the appropriate thing. Why are mergers the appropriate thing? And I think it behooves healthcare leaders to tell that story today for the long-term consequences.

DS: Okay, so to close, make that explicit. What is the practical thing that the health care leaders should do while the researchers are crunching the numbers, the American Hospital Association is talking about their thing. What is the hospital CEO to do?

DJ: Yeah. The key for the hospitals that you own for hospital boards is to be as transparent as possible. To be as honest and candid as possible about why this organization, why these organizations, are coming together and what will happen if they don’t. There’s often a sense that what they’re considering in their merger and acquisition is in comparison to the continuation of the status quo. That we have a choice between doing this or just staying as we are. And in fact, in healthcare there is no continuation of the status quo. Things are going to change. And for most hospital and health systems, things are not changing for the better. It can be difficult after being the center of gravity for a community for a hundred years, particularly in small communities, to say, ‘Things are in such dire straits that we have to do something like this.’

It’s not an easy message, but it’s a critical message, I think, to deliver today. So communities can be aware of where they are, but also what they can expect in the future.

David Shifrin
dshifrin@jarrardinc.com