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Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations

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  • Anne‐Fleur Roos
  • Ramsis R. Croes
  • Victoria Shestalova
  • Marco Varkevisser
  • Frederik T. Schut

Abstract

In most studies on hospital merger effects, the unit of observation is the merged hospital, whereas the observed price is the weighted average across hospital products and across payers. However, little is known about whether price effects vary between hospital locations, products, and payers. We expand existing bargaining models to allow for heterogeneous price effects and use a difference‐in‐differences model in which price changes at the merging hospitals are compared with price changes at comparison hospitals. We find evidence of heterogeneous price effects across health insurers, hospital products and hospital locations. These findings have implications for ex ante merger scrutiny.

Suggested Citation

  • Anne‐Fleur Roos & Ramsis R. Croes & Victoria Shestalova & Marco Varkevisser & Frederik T. Schut, 2019. "Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1130-1145, September.
  • Handle: RePEc:wly:hlthec:v:28:y:2019:i:9:p:1130-1145
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    File URL: https://doi.org/10.1002/hec.3920
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Jason Shafrin’s journal round-up for 9th September 2019
      by Jason Shafrin in The Academic Health Economists' Blog on 2019-09-09 11:00:23
    2. Academic Health Economist’s Blog: Journal Round Up
      by Jason Shafrin in Healthcare Economist on 2019-09-09 21:01:11

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