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

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  • Gregory Adams
  • Monica Noether

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.

Suggested Citation

  • Gregory Adams & Monica Noether, 2011. "Comment on "Hospital Mergers and Competitive Effects: Two Retrospective Analyses"," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(1), pages 33-40.
    • Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:33-40
    DOI: 10.1080/13571516.2011.542953
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    Citations

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    Cited by:

    1. 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.
    2. R. Forrest McCluer & Martha A. Starr, 2013. "Using Difference in Differences to Estimate Damages in Healthcare Antitrust: A Case Study of Marshfield Clinic," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 20(3), pages 447-469, November.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, in: Mark V. Pauly & Thomas G. Mcguire & Pedro P. Barros (ed.), Handbook of Health Economics, volume 2, chapter 0, pages 499-637, Elsevier.

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