# Hospital Consolidation: Reducing access for the poor?

> **NIH AHRQ R36** · UNIVERSITY OF COLORADO DENVER · 2022 · $43,200

## Abstract

PROJECT SUMMARY
Hospitalmergers and acquisitions (M&As) increase concentration in hospital markets.In 2016, 90% of
Metropolitan Statistical Areas were considered “highly concentrated.”5 Much of the literature on hospital M&As
focuses on the effects on private prices and hospital cost reductions.1,6–14 However, despite growing concern
from federal and state regulatory agencies,2,3,15–17 little is known about how M&As affect access to care,
especially for low-income Medicaid and uninsured patients, who most often experience access challenges.18–21
In an effort to improve efficiency and reduce costs, consolidating hospitals may eliminate a service line (i.e.,
whether a service is offered) at one of the M&A hospitals if it is provided at the other, particularly if the service
line is unprofitable.22,23 This could reduce local capacity to provide clinically important services and, in turn,
patients' geographic access. In addition, hospital MAs often result in increased private reimbursement.1,24,25
The economic theory of price discrimination suggests that hospitals seeking to maximize profits may reduce
provision of care to Medicaid and uninsured patients. However, the theory of cross-subsidization suggests that
public and not-for-profit hospitals would instead use increased profits from private patients to further subsidize
care of Medicaid and uninsured patients and unprofitable services in line with their mission.26 These theories
suggest the need to examine M&A-related access changes on both an extensive margin (i.e., whether a
service is provided) and intensive margin (i.e., quantity of services provided).This study will examine M&A-
related changes in hospital service provision and access using national data on hospital characteristics from
the American Hospital Association and Centers for Medicare & Medicaid Services along with discharge-level
data from the Healthcare Cost and Utilization Project State Inpatient Databases for select states. First, I will
determine whether hospitals reduce provision of select inpatient and outpatient service lines after a M&A,
focusing on service lines that are generally unprofitable due to high utilization by Medicaid and uninsured
patients, such as substance use, psychiatric, obstetric, and trauma services. Next, I will estimate the extent to
which Medicaid and uninsured inpatient admissions change following a M&A, focusing on elective admissions.
While regulations ensure access to emergency care, hospitals are not obligated to provide Medicaid and
uninsured patients access to elective inpatient services, such as knee replacements and bariatric surgery.
Thus, changes in elective admissions may best reflect hospitals' efforts to limit or expand care. Building on
these results, I will look at whether M&As result in shifts of Medicaid and uninsured patients to neighboring
hospitals and reduce overall access at the regional scale for these patients. This study addresses an important
knowledge gap by examining the ...

## Key facts

- **NIH application ID:** 10460848
- **Project number:** 1R36HS028582-01A1
- **Recipient organization:** UNIVERSITY OF COLORADO DENVER
- **Principal Investigator:** Margaret M Reid
- **Activity code:** R36 (R01, R21, SBIR, etc.)
- **Funding institute:** AHRQ
- **Fiscal year:** 2022
- **Award amount:** $43,200
- **Award type:** 1
- **Project period:** 2022-05-01 → 2023-09-30

## Primary source

NIH RePORTER: https://reporter.nih.gov/project-details/10460848

## Citation

> US National Institutes of Health, RePORTER application 10460848, Hospital Consolidation: Reducing access for the poor? (1R36HS028582-01A1). Retrieved via AI Analytics 2026-05-23 from https://api.ai-analytics.org/grant/nih/10460848. Licensed CC0.

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