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Consolidation in the Medical Care Marketplace,A Case Study from Massachusetts

In: Mergers and Productivity

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  • Jason Barro
  • David M. Cutler

Abstract

This paper examines consolidation in the Massachusetts hospital market. We find that consolidation is driven primarily by a large decline in the demand for hospital beds, resulting from increased enrollment in managed care and technological changes. The drive to consolidate appears through three primary forces: consolidation for closure; consolidation for economies of scale; and consolidation for network creation.
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Suggested Citation

  • Jason Barro & David M. Cutler, 2000. "Consolidation in the Medical Care Marketplace,A Case Study from Massachusetts," NBER Chapters,in: Mergers and Productivity, pages 9-50 National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberch:8648
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    References listed on IDEAS

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    1. David M. Cutler & Mark McClellan, 1996. "The Determinants of Technological Change in Heart Attack Treatment," NBER Working Papers 5751, National Bureau of Economic Research, Inc.
    2. Lichtenberg, Frank R. & Pushner, George M., 1994. "Ownership structure and corporate performance in Japan," Japan and the World Economy, Elsevier, pages 239-261.
    3. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January.
    4. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, pages 3-21.
    5. Lichtenberg, Frank R. & Pushner, George M., 1994. "Ownership structure and corporate performance in Japan," Japan and the World Economy, Elsevier, pages 239-261.
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    Cited by:

    1. Currie, Janet & Fahr, John, 2004. "Hospitals, managed care, and the charity caseload in California," Journal of Health Economics, Elsevier, vol. 23(3), pages 421-442, May.
    2. Núria Mas, 2013. "Responding to financial pressures. The effect of managed care on hospitals’ provision of charity care," International Journal of Health Economics and Management, Springer, pages 95-114.
    3. Mas, Núria & Seinfeld, Janice, 2008. "Is managed care restraining the adoption of technology by hospitals?," Journal of Health Economics, Elsevier, vol. 27(4), pages 1026-1045, July.
    4. Huckman, Robert S., 2006. "Hospital integration and vertical consolidation: An analysis of acquisitions in New York State," Journal of Health Economics, Elsevier, vol. 25(1), pages 58-80, January.
    5. Janet Currie & Mehdi Farsi & Bentley MacLeod, 2004. "Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts," Working Papers 864, Princeton University, Department of Economics, Industrial Relations Section..
    6. Janet Currie & Mehdi Farsi & W. Bentley Macleod, 2005. "Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts," ILR Review, Cornell University, ILR School, pages 471-493.
    7. Janet Currie & Mehdi Farsi & W. Bentley Macleod, 2005. "Cut to the Bone? Hospital Takeovers and Nurse Employment Contracts," ILR Review, Cornell University, ILR School, pages 471-493.
    8. Wu, Vivian Y., 2009. "Managed care's price bargaining with hospitals," Journal of Health Economics, Elsevier, vol. 28(2), pages 350-360, March.
    9. Ken Miyajima, 2005. "Real Exchange Rates in Growing Economies; How Strong Is the Role of the Nontradables Sector?," IMF Working Papers 05/233, International Monetary Fund.
    10. Mas, Nuria, 2005. "Managed care and the safety net: More pain for the uninsured?," IESE Research Papers D/596, IESE Business School.
    11. David M. Cutler & Jill R. Horwitz, 1998. "Converting Hospitals from Not-for-profit to For-profit Status," NBER Working Papers 6672, National Bureau of Economic Research, Inc.

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