One of the supposed benefits of hospital consolidation is that it can create efficiencies which help to lower costs and improve care quality, in part by getting a bunch of hospitals onto the same EHR.
However, in many cases hospitals are still balkanized well after the fact, with a large percentage of chains still using multiple EHRs across their system years after the merger or acquisition has closed, according to a blog item in Health Affairs.
The pace of hospital consolidation has been extremely brisk of late, and the size of the deals massive, with one study cited by the authors finding more than 360 mergers and acquisition transactions involving more than 2000 hospitals. As the authors point out, one argument often trotted out in favor of large-scale hospital consolidation is that such deals allow high numbers of hospitals to standardize on a single EHR platform.
In theory, this consolidation of EHRs will then, in turn, allow chains to spend less on IT staffing and ongoing system maintenance. However, are these newly-consolidated systems actually realizing such benefits? The answer appears to “no,” the blog item says.
To look at how hospital consolidation is affecting EHR use, researchers used data from 4,720 hospitals gathered by the American Hospital Association survey and IT Supplement from 2012 to 2016. They set out to discover whether acquired hospitals actually do switch EHR vendors to the ones by the acquiring organization, and what EHR vendor choices switching and non-switching hospitals made.
Their analysis concluded that of the 88 hospitals in their sample acquired between 2012 and 2014, 21% were already using the dominant EHR of the acquiring health systems and 35% switched to the dominant vendor. Meanwhile, 44% were using the dominant vendor and didn’t switch by 2016.
Among acquired hospitals that switched, 19% into the same year they were acquired, 36% switched one year post-acquisition, 42% switched after two years and one switched three years after being acquired. Almost three-quarters of hospitals that switched systems post-acquisition moved to Epic or Cerner.
Overall, one-third of acquired hospitals switched to the dominant vendor of the acquiring system, while 44% stayed on a different EHR platform. In other words, four years out one obvious potential benefit of consolidation had not been realized by almost half of the consolidated systems.
The authors point out that their study didn’t isolate the reasons acquired organizations didn’t make the switch, and that those reasons could vary, including any vendor contracts acquired organizations might have had with existing vendors and a lack of funds to get onto the dominant platform. Before drawing broader conclusions on whether IT consolidation between hospitals is a natural result of consolidations, it would help to understand better those who didn’t move forward.
Still, as the blog item rightly points out, this analysis does give policymakers a sound reason to ask tough questions when consolidation supporters make their case. It also supports 2014 research by PriceWaterhouseCoopers finding that IT integration adds 2% to overall hospital operating costs per year during the integration period. When it comes down to it, it seems like some of the conventional assumptions about hospital M&A might be flat wrong.