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The Effects of US Hospital Consolidations on Hospital Quality

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  • Ryan Mutter
  • Patrick Romano
  • Herbert Wong

Abstract

The spate of hospital consolidations that occurred in the late 1990s and early 2000s had a profound impact on the US hospital industry. However, only two published studies using data from five states examined the effects of these consolidations on inpatient quality of care. This paper examines the impacts of hospital consolidations that occurred in 1999 and 2000 in 16 states on 25 measures of quality using pre-post, difference-in-differences models. We categorize hospitals participating in consolidations as acquiring institutions, target institutions, or participants in a "merger of equals". We find that the quality effects of consolidations differ by the hospital's role and the quality measure used. Acquiring hospitals experienced significantly improved quality with respect to iatrogenic pneumothorax and postoperative hemorrhage or hematoma, but the quality impacts for target hospitals and "mergers of equals" were mixed. Hospital consolidations appear to have complex, inconsistent effects on quality, as measured using all-payer administrative data, suggesting the need for antitrust agencies to conduct prospective and retrospective reviews of individual mergers.

Suggested Citation

  • Ryan Mutter & Patrick Romano & Herbert Wong, 2011. "The Effects of US Hospital Consolidations on Hospital Quality," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 18(1), pages 109-126.
  • Handle: RePEc:taf:ijecbs:v:18:y:2011:i:1:p:109-126 DOI: 10.1080/13571516.2011.542961
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    References listed on IDEAS

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    Cited by:

    1. Ron Kemp & Nikki Kersten & Astrid Severijnen, 2012. "Price Effects of Dutch Hospital Mergers: An Ex-post Assessment of Hip Surgery," De Economist, Springer, pages 237-255.
    2. Ralf Dewenter & Thomas Jaschinski & Björn A. Kuchinke, 2013. "Hospital Market Concentration and Discrimination of Patients," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 133(3), pages 345-374.
    3. Gaynor, Martin & Town, Robert J., 2011. "Competition in Health Care Markets," Handbook of Health Economics, Elsevier.
    4. Chen, Yongmin & Gayle, Philip, 2013. "Mergers and Product Quality: Evidence from the Airline Industry," MPRA Paper 51238, University Library of Munich, Germany.
    5. Christian Fons-Rosen & Sebnem Kalemli-Ozcan & Bent E. Sørensen & Carolina Villegas-Sánchez & Vadym Volosovych, 2017. "Foreign Investment and Domestic Productivity: Identifying Knowledge Spillovers and Competition Effects," Working Papers 986, Barcelona Graduate School of Economics.

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    Keywords

    Hospitals; Consolidations; Quality;

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