When Getting Bigger is too Big—Challenges of Growing Healthcare Systems

Mini Abstract

Nearly two hospital mergers occur per week and the majority of hospitals are now part of a larger health system. As health systems continue to grow in size and geographic coverage, these changes could have unintended consequences for many different healthcare stakeholders. This surgical perspective outlines emerging challenges associated with the growth of health systems and potential strategies to monitor and mitigate the potential adverse impact of these ongoing changes.

Since passage of the Affordable Care Act, nearly two hospital mergers occur per week with 64% of acute care hospitals now part of a multi-hospital health system comprising 84% of acute care hospital beds.[1,2] Not surprisingly, increased consolidation of local and regional healthcare markets has been associated with decreased competition—specifically, in 90% of health care markets, market concentration for hospitals is currently high.[1,3] As health systems continue to grow in size and geographic coverage, these changes could have unintended consequences for many different healthcare stakeholders.

While consolidation of hospitals into larger health systems present opportunities to leverage unique financial and clinical advantages of scale, we could be approaching a point where big health systems may simply be too big. Although increasing market share is likely financially beneficial for the health system, key stakeholders including patients, providers, and Graduate Medical Education (GME) may begin to experience (or may already be experiencing) unintended consequences. In this surgical perspective, we outline emerging challenges associated with the growth of health systems and potential strategies to monitor and mitigate the potential adverse impact of these ongoing changes (Table 1).

Table 1.

Emerging challenges, early waring signs, and potential solutions for growing healthcare systems.

Stakeholder	Emerging Challenge	Early Warning Signs	Potential Solution
Patients	Difficulty distinguishing quality across multiple sites within the same network	Within network variation of quality measure for high-risk procedures	Procedure-specific selective referral to highest quality site(s) within system
	Increased travel “within network” for specialty care	Increase in average distance from patient residence to site of care	Local regionalizing of specialty care including “micro hubs”
Providers	Work across multiple sites of care with different structure, processes, and cultural norms	Growing workforce dissatisfaction	Prioritize deploying providers to geographically close locations (to where they live and other sites where they work)
	Competing against each other for market share	Increasing disparity between top and bottom productivity	Compensation models that reward care coordination versus RVUs
Learners	Variable teaching quality across growing number of faulty	Slower progression in learning milestones	Dedicated teaching services within hospitals
	Increased travel burden	Programs with lower scores and satisfaction on annual survey	Dedicated sites within networks for learners

Patients

Market consolidation by health systems could create new challenges for patients in obtaining high quality care. Many already have trouble identifying high quality providers for a given service and consolidation could further exacerbate this issue or even negatively affect patient access (depending on their specific insurance network coverage).[4] Patients might also experience confusion if a hospital where they routinely received care now bears an unfamiliar name. Similarly, they could have difficulty navigating new processes for establishing or scheduling care, even if they are seeking an appointment at a once familiar location. In addition, if most (or all) hospitals in a given region were to carry a limited number of health systems’ names, this could create a perceived lack of competition and options in the local market. Finally, perceptions about the quality of care provided and overall patient experience might also be negatively impacted if unfamiliar, new processes that may be standard across the health system are implemented.[5] Increased travel time for in-network care as well as unwarranted variation in care quality may serve as early warning signs that health system growth is not facilitating better patient care.

Optimizing patient care within a growing hospital network may benefit from intentional geographic designations for care. For example, health systems could consider regionalizing care to specific hospitals within their system for procedures and services with well-established volume-outcome relationships. This would help to guide patients to the specific infrastructure, resources, and/or providers who can ensure they have the best opportunity to receive the highest quality care. To mitigate the potential for increased travel burden which could be a consequence of this type of reorganization of clinical services and could adversely affect patient satisfaction and/or access, health systems could consider creating “micro hubs” (e.g., outlying clinics where patients can receive some of their outpatient care) in order to optimize geographic access, service volume, and patient experience. Finally, as many growing health systems begin offering their own insurance products (e.g., Medicare Advantage plan), they should ensure coverage is offered across the entire health system and inclusive of all types of specialty care offered. This would be in contrast to other, narrower network insurance plans that limit access for covered patients.[6] In doing so, growing health systems can help leverage their size to improve access for patients.

Providers

For providers, local or regional market consolidation by a single health system may pose important challenges. With health systems covering more geographic territory, providers may have to commute further and cover services at multiple sites of care. Travel burden aside, because there are a fixed number of patients within a given market, providers could find themselves competing against each other (even within the same organization, hospital, or department) to achieve clinical productivity targets tied to salary and reimbursement. This could worsen pre-existing disparities in patient referrals and/or pay which might favor those with well-established clinical practices, referral networks, or expertise and knowledge about navigating an increasingly complex system. Early signs of unproductive, intra-organizational competition between colleagues for the same pool of patients could include lower self-reported morale, job satisfaction, and confidence in the organization.

Addressing these challenges for providers will require modifications to compensation and/or service delivery models. Regarding compensation, health systems will need to adjust provider reimbursement models to prioritize patient experience and care coordination at least as much as (if not more than) clinical productivity. For service delivery, it will be necessary to critically evaluate whether consolidating specialty care to certain hospitals within the health system would create geographic advantages for all stakeholders. Changes to both compensation and service delivery models could benefit all parties by shifting the sole focus away from clinical productivity in favor of approaches that optimize patient care and experience while minimizing additional clinical and administrative burden. Optimizing practice and provider satisfaction are important considerations at a time when clinicians are increasingly reporting signs of burnout and dissatisfaction with the medical profession.[7] Notably, there is unlikely to be a “one size fits all” approach that can be employed across every health system or even across all hospitals within a given system. Nonetheless, areas and opportunities where it is reasonable and potentially feasible to standardize (e.g., standardized electronic medical record across all hospitals within the health system) should be balanced with identifying unique local opportunities to improve the quality of care and patient experience (e.g., site-specific quality improvement).[8]

Graduate Medical Education

While a growing health system may provide trainees in GME programs with ample learning opportunities and exposure to a variety of different, real-world practice settings, it might also create new, practical barriers to an optimal educational experience. Having multiple sites of learning makes it more difficult to standardize the educational experience and ensure uniformity in the quality of teaching. This could be a particular problem at sites that did not have trainees prior to joining the health system. If programs are not deliberate in their allocation of residents to the different hospitals across the health system, this will translate into less time at more hospitals which could dilute the educational experience or even lead to an emphasis on service rather than education. Moreover, residents in some programs already express frustration with the interplay between the training experience and their overall wellness.[9,10] Adding additional travel burden to multiple training sites is likely to further decrease residents’ personal time which could further erode their feelings of well-being. Such challenges may manifest as programs having lower satisfaction scores on Accreditation Council for Graduate Medical Education trainee surveys or residents progressing more slowly through learning milestones.

There are two potential strategies that could help to address these GME-related challenges. The first would be designating a finite number of select sites (rather than all hospitals) within the health system that are rotations for learners. Consolidating the learning experience in this way would be advantageous for both the training program and the training experience for learners because it would allow resources to be focused and robustly developed at a limited number of sites. Such a strategy could also help address concerns that hospital mergers facilitate transfer of GME resources to for-profit health systems.[11] If concentrating the learning experience to a discrete number of hospitals within the health system either cannot or would not work well, an alternative strategy would be to establish dedicated teaching services at each hospital which are staffed by clinicians who have a demonstrated track record of excellence in teaching and a commitment to the learner’s educational experience.

Conclusion

As key stakeholders, surgical societies and state agencies potentially have an important role to play in helping newly formed health systems optimize care quality. Surgical societies can facilitate the formation of quality collaboratives focused on health system integration or by providing a platform for growing health systems to compare their processes and outcomes. Similarly, state agencies can look for opportunities to support hospitals networks locally and regionally. For example, by implementing policies that limit insurers’ ability to create narrow networks or that incentivize regional collaboration between health systems.[12]

The trend toward fewer independent hospitals and smaller, local health systems in favor of larger, regional networks is likely to continue. However, it will be critical to ensure these changes do not erode patient’s confidence in the care they receive, providers’ satisfaction with their work (at a time when healthcare is already at a critical inflection point), or the quality of education provided by GME training programs. Accomplishing this will require health systems to remember the mission of the medical profession is to provide patients with access to the care they need rather than viewing medicine as a financial growth industry.