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New research from Harvard University and the National Bureau of Economic Research suggests that, though consolidated health systems might provide slightly better care than private practices, they cost patients a whole lot more.
The study, "Organization and Performance of US Health Systems," looked at 580 health systems in the United States. It found that hospital services cost a whopping 31% more at consolidated health care systems as opposed to private care providers, according to an article by Harvard Medical School. Moreover, physician services in large systems have a 12% to 26% higher price tag than private practices.
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However, though costs were up, the quality of care delivered was only slightly better at consolidated health systems than private practices, the Harvard article reports.
"One of the key arguments for hospital mergers and practice acquisition was that health systems would deliver better-value care for patients," Nancy Beaulieu, study first author, told Harvard. "This study provides the most comprehensive evidence yet that this isn't happening."
Some experts had hoped that consolidated care systems would offer better care than smaller practices for similar or lower prices due to economies of scale. And indeed, the new research shows that consolidated health care systems are, on average, much larger than private practice. For instance, while less than a quarter of non-system hospitals had more than 100 beds, more than two-thirds of system hospitals did, Harvard reports.
But economies of scale don't seem to have had a positive effect on prices.
"There's no question that large, sophisticated health systems have benefits over independent systems," says David Cutler, one of the study authors, according to Harvard Medical School. "Big systems tend to be less vulnerable to economic downturns and they can provide specialized care that would be difficult to maintain in smaller systems. But the hoped-for cost savings benefits of integrated health systems have not yet materialized."
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