Consolidation of health services after a potential sale of SSM Health's St. Mary's Hospital in Jefferson City and Mexico will lead to savings through an increase in health care efficiency, MU Health's CEO Jonathan Curtright has said.
But studies and analyses on the topic can reach different conclusions.
A recent analysis conducted for the New York Times by the Nicholas C. Petris Center at the University of California, Berkeley, found "the price of an average hospital stay soared, with prices in most areas going up between 11 percent and 54 percent in the years afterward" in the 25 metropolitan areas in the United States with the highest rates of hospital consolidation from 2010-13.
Joplin is one of the metro areas identified in the analysis as having seen an increase in its average hospital stay price that was higher than the average increase in the state.
The Petris Center's analysis found that "a third of the metropolitan areas experienced increases in the cost of hospital stays of at least 25 percent from 2012 to 2014, from roughly $12,000 to at least $15,000," according to the New York Times, in its Nov. 14 story "When hospitals merge to save money, patients often pay more."
The Times cited the director of the Petris Center as saying prices rise more steeply when large hospital systems that already have large market shares buy doctors' groups.
The News Tribune tried to contact the Petris Center to ask about the methodology of its study, but did not receive a response.
The News Tribune also asked MU Health and SSM Health to comment on the New York Times' reporting on the Petris Center analysis and to more specifically explain how a reduction in health care inefficiencies, such as through a consolidation, leads to reduced patient costs - and where and how patients could expect to notice reduced costs.
Both organizations deferred to the Missouri Hospital Association for more information.
However, Curtright said in a later interview with the News Tribune that an increase in efficiency "makes it so that you're much more competitive to put in for insurance contracts."
"Your costs are going to be much less than other places for these specialty services, and it makes it so you're going to be much more attractive to consumers. And then they're going to talk to their insurance companies and say, 'Make sure that St. Mary's in Jefferson City, that must be a part of my insurance contract,'" he said.
Curtright was previously the chief operating officer of Indiana University Health, which is a system he said is still integrating after a merger between Methodist and University hospitals in Indianapolis in 1996-97.
"What's happening is that many, many times when they first got together organizationally, they had competing programs literally a mile apart," he said. He described that programs - cancer care, cardiovascular, transplants, neurosurgery - have come to be clustered at one hospital or the other.
"You had certain disciplines that gravitated to one location or the other as physicians got used to working with each other. As you can imagine, that became much more efficient over time, because you didn't have smaller, duplicated programs," Curtright said.
There is some evidence that hospital mergers reduce costs at hospitals.
While the News Tribune did not contact the Missouri Hospital Association for this story, MU Health spokeswoman Jesslyn Chew provided a link to findings from the American Hospital Association.
The AHA serves its 43,000 individual hospital, health care system, network and other care provider members through representation and advocacy activities to ensure "members' perspectives and needs are heard and addressed in national health policy development, legislative and regulatory debates, and judicial matters." The organization says it is primarily funded through member dues.
The AHA's 2017 study "Hospital merger benefits: Views from hospital leaders and econometric analysis" interviewed 20 different hospital system leaders, who were asked to "describe the cost reductions and quality enhancement that may be achieved through mergers."
A second part of the study also analyzed the cost per admission, revenue per admission and inpatient quality measures "for hospitals that have undergone mergers or acquisitions with similar hospitals that have not."
The study looked at changes for "all non-federal short-term acute care hospitals in the United States between 2009 and 2014."
The results of the analysis indicated that "mergers were associated with a 2.5 percent reduction in operating expense per admission at the acquired hospitals. The average annual operating expense of the merging hospitals in our study is approximately $235 million, implying average merger-related annual savings of $5.8 million. We also found that net patient revenue per admission - which includes revenue associated with patients covered by commercial health insurers - declined at the acquired hospitals."
The AHA study found "less precise findings on quality (of care), however, (which) may be related to the difficulty in developing reliable, comprehensive metrics with which to measure quality."
The AHA reported this month on an update of its analysis, which concluded, "We continue to see a statistically significant decline post-merger in expense per adjusted admission, with the effect being greatest for mergers of hospitals that are in close proximity" - 30 miles apart or less.
The AHA shared in its report this month similar results of similar studies from the Deloitte Center for Health Solutions in collaboration with the Healthcare Financial Management Association, and an academic study by professor Matt Schmitt of UCLA's School of Management, published last year in the Journal of Health Economics.
SSM's COO Steve Smoot said at last Monday's public forum that research on the relationship between hospital consolidations and effects on costs for patients is not definitive. He cited the Mayo Clinic and major hospital systems in California, Utah and Pennsylvania as examples that show costs can be reduced and care quality can be increased through an integrated care approach.
But the Coalition for Choice's spokeswoman, Connie Farrow, said, "These success stories are very unusual and have taken decades to develop." The Coalition for Choice is a local group that's opposed to the sale of St. Mary's to MU Health.
Zack Cooper - a professor of public health and economics at Yale University, where he also serves as the director of health policy at the school's Institution for Social and Policy Studies - is quoted in the Nov. 14 New York Times story as saying, "Within the academic community, there is near unanimity" that hospital consolidation drives up the cost of care.
Insurers can lose bargaining power after a merger that forces them to negotiate access to all hospitals in an area at once as an all or nothing package.
The Times story notes hospital leaders in other parts of the country have defended charging private insurers higher rates after mergers by classifying acquired hospitals as top-tier institutions, or by citing low reimbursements from government sources such as Medicaid.
The Indianapolis Star reported last year on a Rand Corporation study that found Indiana hospitals charge prices for outpatient services that are much higher than what Medicare charges for the same procedures.
Indiana University Health, for example, was found to charge "almost six times the Medicare rate for angioplasty with a stent." Other hospitals in the Indianapolis area were found to charge "more than five times the Medicare rate for both emergency department visits and laparoscopic surgery" and "five times the Medicare rate for endoscopy."
IU Health officials were reported not to have taken issue with the results of the Rand study, but added caveats that, for example, emergency department rates are higher at hospitals with Level 1 Trauma Centers.
Curtright came to MU Health in February 2016 after he was COO of Indiana University Health; the Indianapolis Star's report was published in September 2017.
The president of the Indiana Hospital Association was reported to have questioned the use of Medicare prices as a point of comparison, because a hospital's prices may incorporate value in quality of care that Medicare's prices do not.
Jefferson City Medical Group's President Jeffrey Patrick said "integrated care" means "control (of) every point of entry into the health system, including every physician practice. This results in administrators primarily controlling health care, not patients or physicians."
The Coalition for Choice added that, "Allowing MU Health to control the health care market will drive up insurance costs for employers, reduce treatment choice for patients, as well as reduce job opportunities and for doctors, nurses and other medical professionals."
Curtright, in closing remarks to his interview with the News Tribune, made commitments to local leadership and job protection if St. Mary's is to be acquired by MU Health.
"It's going to be much more efficient. It's going to make it so there's more care that's provided locally. There's going to be a chance for more and more of those jobs to be protected as much as possible as part of a larger system, and finally, once again, we have this fundamental belief that local leadership should be the norm," Curtright said.