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Why healthcare providers merge

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  • Postma, Jeroen
  • Roos, Anne-Fleur

Abstract

In many OECD countries, healthcare sectors have become increasingly concentrated as a result of mergers. However, detailed empirical insight into why healthcare providers merge is lacking. Also, we know little about the influence of national healthcare policies on mergers. We fill this gap in the literature by conducting a survey study on mergers among 848 Dutch healthcare executives, of which 35% responded (resulting in a study sample of 239 executives). A total of 65% of the respondents was involved in at least one merger between 2005 and 2012. During this period, Dutch healthcare providers faced a number of policy changes, including increasing competition, more pressure from purchasers, growing financial risks, de-institutionalisation of long-term care and decentralisation of healthcare services to municipalities. Our empirical study shows that healthcare providers predominantly merge to improve the provision of healthcare services and to strengthen their market position. Also efficiency and financial reasons are important drivers of merger activity in healthcare. We find that motives for merger are related to changes in health policies, in particular to the increasing pressure from competitors, insurers and municipalities.

Suggested Citation

  • Postma, Jeroen & Roos, Anne-Fleur, 2016. "Why healthcare providers merge," Health Economics, Policy and Law, Cambridge University Press, vol. 11(2), pages 121-140, April.
    • Handle: RePEc:cup:hecopl:v:11:y:2016:i:02:p:121-140_00
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    Cited by:

    1. Mesman, Roos & Faber, Marjan J. & Berden, Bart J.J.M. & Westert, Gert P., 2017. "Evaluation of minimum volume standards for surgery in the Netherlands (2003–2017): A successful policy?," Health Policy, Elsevier, vol. 121(12), pages 1263-1273.
    2. Owsley, Kelsey M. & Lindrooth, Richard C., 2022. "Understanding the relationship between nonprofit hospital community benefit spending and system membership: An analysis of independent hospital acquisitions," Journal of Health Economics, Elsevier, vol. 86(C).
    3. Cyril Benoît, 2023. "The regulatory path to healthcare systems’ financialization," Post-Print hal-04220439, HAL.
    4. van Dijk, T.S. (Tessa) & van der Scheer, W.K. (Wilma) & Janssen, R.T.J.M. (Richard), 2021. "Power, legitimacy and urgency: Unravelling the relationship between Dutch healthcare organisations and their financial stakeholders," Health Policy, Elsevier, vol. 125(8), pages 1077-1084.

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