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Hospital Mergers and Competitive Effects: Two Retrospective Analyses

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Author Info

  • Deborah Haas-Wilson
  • Christopher Garmon

Abstract

We present empirical analyses of the effects of two hospital mergers - both occurring in the northern suburbs of Chicago in 2000 - on the pre- and post-merger prices negotiated with commercial health insurers. Using difference-in-differences methodology and data on actual transaction prices, specifically the prices paid by private health insurance companies and patients for inpatient care, we find one of the mergers was anticompetitive. Relative to price increases at other hospitals, the merger between Evanston Northwestern and Highland Park Hospitals led to large and statistically significant post-merger price increases. Our results are robust across data sources, control groups, and case-mix adjustment methods.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Journal of the Economics of Business.

Volume (Year): 18 (2011)
Issue (Month): 1 ()
Pages: 17-32

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Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:17-32

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Related research

Keywords: Hospital Mergers; Competition in Markets for Health Care Services; Antitrust Policy;

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Cited by:
  1. Martha A. Starr & R. Forrest McCluer, 2012. "Using Difference-in-Differences to Estimate Damages in Healthcare Antitrust: A Case Study of Marshfield Clinic," Working Papers 2012-07, American University, Department of Economics.
  2. Orley C. Ashenfelter & Daniel Hosken & Matthew C. Weinberg, 2014. "Did Robert Bork Understate the Competitive Impact of Mergers? Evidence from Consummated Mergers," NBER Working Papers 19939, National Bureau of Economic Research, Inc.
  3. Martin Gaynor & Robert J. Town, 2011. "Competition in Health Care Markets," NBER Working Papers 17208, National Bureau of Economic Research, Inc.
  4. Gaynor, Martin & Laudicella, Mauro & Propper, Carol, 2012. "Can governments do it better? Merger mania and hospital outcomes in the English NHS," Journal of Health Economics, Elsevier, vol. 31(3), pages 528-543.
  5. Martin Gaynor & Kate Ho & Robert Town, 2014. "The Industrial Organization of Health Care Markets," NBER Working Papers 19800, National Bureau of Economic Research, Inc.
  6. Ron Kemp & Nikki Kersten & Astrid Severijnen, 2012. "Price Effects of Dutch Hospital Mergers: An Ex-post Assessment of Hip Surgery," De Economist, Springer, vol. 160(3), pages 237-255, September.

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