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The anatomy of a hospital system merger: the patient did not respond well to treatment

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  • Gaynor, Martin
  • Sacarny, Adam
  • Sadun, Raffaella
  • Syverson, Chad
  • Venkatesh, Shruthi

Abstract

Despite the continuing US hospital merger wave, it remains unclear how mergers change, or fail to change, hospital behavior and performance. We open the "black box" of hospital practices through a mega-merger between two for-profit chains. Benchmarking the merger's effects against the acquirer's stated aims, we show they achieved some of their goals, harmonizing electronic medical records and sending managers to target hospitals. Post-acquisition managerial processes were similar across the merged chain. However, these interventions failed to drive detectable gains in performance. Our findings demonstrate the importance of organizations for merger research in health care and the economy more generally.

Suggested Citation

  • Gaynor, Martin & Sacarny, Adam & Sadun, Raffaella & Syverson, Chad & Venkatesh, Shruthi, 2022. "The anatomy of a hospital system merger: the patient did not respond well to treatment," LSE Research Online Documents on Economics 117852, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:117852
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    6. Nicholas Bloom & Renata Lemos & Raffaella Sadun & John Van Reenen, 2020. "Healthy Business? Managerial Education and Management in Health Care," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 506-517, July.
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    More about this item

    Keywords

    management;

    JEL classification:

    • I10 - Health, Education, and Welfare - - Health - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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