14661: Mission vs. Margin: The Effects of Catholic Health System Ownership on Hospital Operations (session 25466)

Background: Health system acquisitions have accelerated in recent decades, often leading to cost-cutting strategies at newly acquired hospitals. Catholic systems, which operate 4 of the 10 largest U.S. healthcare systems, face pressures to maintain their mission-oriented identities while staying financially viable. We estimate differences in hospital response to acquisitions by Catholic vs. non-Catholic systems.

Methods: American Hospital Association national survey data from 2009-2022 (n=33,552 hospital-years) were linked to multiple sources of ownership data. We identified 76 independent hospitals acquired by Catholic systems (“Catholic-acquired”), 631 independent hospitals acquired by non-Catholic systems (“non-Catholic-acquired”), and 2,015 never-acquired hospitals. Using quasi-experimental difference-in-differences methods, we compared changes in hospital operations before and after acquisition relative to the control group of never-acquired hospitals. Outcomes include hospital provision of mission-oriented services, obstetrics care, utilization, operating expenses, and employment.

Results: Following acquisition, Catholic- acquired hospitals were more likely to provide chaplaincy [average treatment effect on the treated (ATT) 10.41 percentage-points (pp); 95% CI 1.36-19.46] and charity care (ATT 3.97 pp; 95% CI 0.40-7.54) compared to never-acquired hospitals, whereas non-Catholic-acquired hospitals were less likely to operate an obstetrics unit (ATT -3.45 pp, 95% CI -5.70, -1.21) and had reduced obstetric bed count (ATT -0.87, 95% CI -1.30, -0.44). Changes in operating expenses and employment were similar for Catholic-acquired and non-Catholic- acquired hospitals.

Conclusion: While acquisition effects broadly align with the cost-containment strategies observed in prior research, there were heterogeneous effects based on system ownership. Catholic systems preserved or expanded mission-oriented services, while non- Catholic systems were more likely to cut obstetrics care.

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