Mergers involve the dissolution of one or more similar organizations and their assimilation by another. Mergers are undertaken either to eliminate direct acute care competitors or to expand acute care networks. They frequently convert inpatient capacity to other functions; only rarely does the acquired hospital continue acute care services after a merger (Bogue et al., 1995). Between 1980 and 1992, AHA reported 215 mergers involving 445 hospitals or health care systems (AHA, 1992).7 The AHA recorded another 18 completed mergers in 1993 (AHA, 1994c). More than 650 hospitals were involved in mergers or acquisitions in 1994, affecting more than 10 percent of the nation's hospitals. This number includes 219 investor-owned hospitals that were merged into other investor-owned chains and 154 investor-owned hospitals whose mergers into other chains were expected to be completed in 1995. In addition, 301 other hospitals were involved in 176 such arrangements during 1994 (Lutz, 1994).
As a result of closures, mergers, networking, and acquisitions, the number of independent community hospitals has been declining since the late 1970s. After declining rapidly between 1985 and 1990, the rate of decline during the 1990s has slowed. The number of community hospitals declined from 6,193 in 1970 to 5,829 in 1980, and 5261 in 1993. Between 1983 and 1993, admissions to these hospitals declined 15 percent, from 36 million to nearly 31 million (AHA, 1994a). The magnitude of decline varies by region, hospital size, and metropolitan status. (See Table 2.1 in Part II of the report.)
Mergers and integration of institutions, in the context of increasing restructuring of the delivery of health services, may provide an opportunity to rethink the way services are offered in many institutions and offer an approach to structural change. The possibility exists for avoiding duplication and reducing costs. For example, in addition to collapsing centralized services such as human resources, financing, and information services, clinical programs may be consolidated, potentially shifting nursing and other health personnel from their accustomed site of work.
In the years immediately following the establishment of the PPS, noticeable reductions were observed in hospital inpatient admissions and inpatient days of care. Although this trend continued in the 1990s, the rate of the decline has slowed. Declining hospital admissions combined with shorter lengths of stay resulted in a 21 percent decline in inpatient days between 1983 and 1993 (AHA, 1994a). This drop, in turn, has led to a reduction in the number of beds staffed for use (see Table 3.1).