Does Merger and Acquisition Activity Play a Role in The Pre-Existing Healthcare Initiatives of Improved Quality and Decreased Costs Highlighted by The Affordable Care Act?

Does Merger and Acquisition Activity Play a Role in The Pre-Existing Healthcare Initiatives of Improved Quality and Decreased Costs Highlighted by The Affordable Care Act? by Dawn Constance Mckell July 18, 2016 Chair: Conrad Ciccotello Major Academic Unit: Finance, Wealth Management This is a quantitative study of archival data that examines Merger and Acquisition (M&A) activity using currently established healthcare quality and financial performance metrics. The research seeks to explicate the relationship between M&A activity and M&A experience in the healthcare industry as it relates to initiatives aimed at improving the quality and decreasing the cost of healthcare. The Affordable Care Act (ACA) legislation appears to be contributing to a trend toward M&A consolidation; by illuminating how this trend potentially impacts healthcare quality and cost reduction initiatives, this study’s contribution is both useful and practical. The units of analysis are Medicare reporting hospitals, hospital systems, and related healthcare providers that have or have not experienced an M&A or multiple M&As. The study shows a statistically significant improvement in quality each year from 2006–2014, which is reflected in higher scores for the four quality metrics measured. M&A activity, as measured by acquisition status and acquirer experience, did not appear to influence these quality metrics, with the exception of the heart failure measure, which