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Care costs more in consolidated health systems

Press releases may be edited for formatting or style | January 25, 2023 Business Affairs

More information on the health systems and provider database and research conducted as part of the health systems project can be found at NBER Health Systems Project.

The researchers noted that the new database provides a crucial foundation for future research that could help identify areas where integrated health systems may be outperforming independent practices and hospitals or guide efforts for health systems still hoping to achieve the potential benefits of consolidation, while avoiding increased costs.

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“There’s no question that large, sophisticated health systems have benefits over independent systems,” said study author David Cutler, the Otto Eckstein Professor of Applied Economics at Harvard. “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.”

Authorship, support, disclosures

Co-authors on the study include Michael Chernew, J. Michael McWilliams, Mary Beth Landrum, and Andrew Hicks of HMS. Maurice Dalton, Angela Yutong Gu, Michael Briskin, Rachel Wu, Zakaria El Amrani El Idrissi, and Helene Machado of NBER also contributed to this research.

This study was supported by a grant from the Agency for Healthcare Research and Quality (AHRQ) U19HS024072.

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