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Comment on "Hospital Mergers and Competitive Effects: Two Retrospective Analyses"

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  • Gregory Adams
  • Monica Noether
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    Abstract

    This note explains why the difference-in-differences methodology, as applied by Deborah Haas-Wilson and Christopher Garmon in their paper "Hospital Mergers and Competitive Effects: Two Retrospective Analyses" contained in this issue, does not produce credible results when applied to an assessment of the merger of Evanston and Highland Park Hospital, north of Chicago. Because of data deficiencies, an inability to control adequately for variation in factors that might affect the rate of price changes, and questionable assumptions about the pre-merger equilibrium, the econometric results are inconsistent with other market factors that indicated that the merging hospitals were not close competitors. These market conditions are instead consistent with the view of the largest payer, who opined that the transaction had no effect on its ability to obtain competitive rates.

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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: 33-40

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    Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:33-40

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    Related research

    Keywords: Difference-in-Differences Analysis; Hospital Merger; Competition; Antitrust; Retrospective Analysis;

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    Cited by:
    1. Martin Gaynor & Robert J Town, 2012. "Competition in Health Care Markets," The Centre for Market and Public Organisation 12/282, Department of Economics, University of Bristol, UK.
    2. Gaynor, Martin & Laudicella, Mauro & Propper, Carol, 2012. "Can governments do it better? Merger mania and hospital outcomes in the English NHS," CEPR Discussion Papers 8802, C.E.P.R. Discussion Papers.

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