The Competitive Effects of Not-for-Profit Hospital Mergers: A Case Study
Applying conventional horizontal merger enforcement rules to nonprofit hospitals is controversial. Critics contend that the different objective function of not-for-profits entities should mitigate competitive concerns about mergers involving nonprofit hospitals. We analyze a merger that reduced the number of competitors (both nonprofit) in the alleged relevant market from three to two. We find that the transaction was followed by significant price increases; we reject the hypothesis that these price increases reflect higher post-merger quality. This study should help policymakers assess the validity of current merger enforcement rules, especially as they apply to not-for-profit enterprises. Copyright 2001 by Blackwell Publishing Ltd
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Volume (Year): 49 (2001)
Issue (Month): 1 (March)
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