President and CEO, HRM Solutions, LLC

Dissertation Title

The Impact of Hospital Change Ownership on Hospital Quality of Care as Evidenced by Patient Satisfaction Scores and Readmission Rates

Dissertation Abstract

Much of the literature on current hospital consolidation activity reveals that hospitals and health systems are experiencing an inordinate amount of increased merger and acquisition activity due to the impact of healthcare reform legislation. The implementation of the Affordable Care Act of 2010 resulted in many hospital and health system providers seeking consolidation as a means to enhance resources and capital. These efforts have resulted in many hospitals changing ownership structures and creating new combined entities or in hospitals joining existing systems to form an even larger health system.

Although a substantial amount of literature reviews the financial implications of these hospital consolidations and ownership changes, research reviewing the quality impact of this consolidation activity is limited. This study, therefore, focuses on the impact and relationship between hospital change of ownership through a merger and hospital quality of care, with quality of care being measured by readmission rates and patient satisfaction scores. The hypotheses studied include: (1) hospital consolidations or changes of ownership will have an impact on a hospital’s 30-day readmission rates; (2) these changes will have an impact on a hospital’s patient satisfaction scores; and (3) hospitals that have a change of ownership status from 2009–2011 will show an improvement in HCAPHS scores and readmission rates as compared to hospitals that did not undergo these changes during the same time period.

Results revealed that hospitals changing ownership through mergers or consolidations do not have a significant empirical impact on hospital quality as indicated by readmission rates or patient satisfaction scores. The study also indicated that hospitals that experienced this type of ownership change or consolidation between 2009 and 2011 showed little difference in HCAPHS scores and readmission rates when compared to hospitals that did not experience a similar change during the timeframe.

One implication of these findings is that the rationale for organizations that sought to change ownership or to consolidate with other hospitals and health systems during this time frame is primarily based on economics and market competitiveness. Quality, therefore, has not been a primary objective of such initiatives but could be in the future. Keywords: Change of Ownership, Consolidation, Merger, Quality of Care, Patient