Expecting Harm? The Impact of Rural Hospital Acquisitions on Maternal Health Care

While numerous papers document the effects of mergers on cost and quality, the effects of hospital mergers on access to care are less certain. Merging hospitals may limit access by closing one of the affected hospitals or eliminating individual service lines. However, hospital systems may have more resources to improve care delivery. We study the impact of hospital mergers on obstetric care in rural markets, where there may be heightened concern about the availability of local care options. Using a differences-in-differences approach, we find that when rural hospitals are acquired, there are substantial increases in the probability of obstetric unit closures, with resulting large reductions in the number of births at the hospital. We find mixed effects on health outcomes: there are small increases in maternal morbidity, but no changes in newborn outcomes on average. However, there are improvements of newborns with Medicaid coverage. Additionally, we find decreases in maternal transfers and increases in procedures consistent with women delivering in more resourced hospitals.