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A new study says hospital supply costs don't decrease a lot after mergers. Photo: BSIP/UIG via Getty Images

New research shows hospitals aren't saving a lot of money on routine expenses — such as surgical staples, stents and implants — after they merge with or acquire other hospitals.

Why it matters: Lowering costs is one of the primary justifications hospitals give for consolidating, but this developing research indicates that argument doesn't carry a lot of weight.

By the numbers: Hospitals that were acquired in the past several years saved an average of 1.5% annually on supplies, devices and other equipment, according to the study. That equates to just a fraction of the savings that hospitals touted as a benefit of their mergers.

  • Hospitals have argued bigger systems will have more negotiating power for the things they have to buy, which will lower costs overall.
  • Most of the savings the study identified came from reduced prices for items like like spine and joint devices. But costs were not significantly lower across the board.
  • "We view this potential 'synergies on input cost' argument much more skeptically now than going into this study," said Matt Grennan, a health care management professor at the University of Pennsylvania and one of the authors of the study.
  • The American Hospital Association responded in a statement that it was reviewing the paper but argued that "regulatory barriers, including the anti-kickback law, limit the ability of hospitals to work with physicians to bring down purchasing costs further."

Go deeper

Neera Tanden withdraws nomination for Office of Management and Budget director

Neera Tanden testifying before the Senate Budget Committee in Washington, D.C., in February 2021. Photo: Anna Moneymaker/The New York Times/Bloomberg via Getty Images

Neera Tanden withdrew her name from nomination to lead the Office of Management and Budget after several senators voiced opposition and concern about her qualifications and past combative tweets, President Biden announced Tuesday.

Why it matters: Tanden’s decision to pull her nomination marks Biden's first setback in filling out his Cabinet with a thin Democratic majority in the Senate.

What's ahead for the newest female CEOs

Jane Fraser (L) and Rosalind Brewer. Photos: Jason Redmond/AFP via Getty Images; Rodrigo Capote/Bloomberg via Getty Images.

The number of women at the helm of America’s biggest companies pales in comparison to men, but is newly growing — and their tasks are huge.

What's going on: Jane Fraser took over at Citigroup this week, the first woman to ever lead a major U.S. bank. Rosalind Brewer will take the reins at Walgreens in the coming weeks (March 15) — a company that's been run by white men for more than a century.

3 hours ago - Health

Biden says U.S. will have enough vaccines for 300 million adults by end of May

President Biden. Photo: Anna Moneymaker-Pool/Getty Images

President Biden on Tuesday said that ramped-up coronavirus vaccine production will provide enough doses for 300 million Americans by the end May.

Why it matters: That's two months sooner than Biden's previous promise of enough vaccines for all American adults by the end of July.