IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/117852.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/117852/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nicholas Bloom & John Van Reenen, 2007. "Measuring and Explaining Management Practices Across Firms and Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1351-1408.
    2. Gautam Gowrisankaran & Aviv Nevo & Robert Town, 2015. "Mergers When Prices Are Negotiated: Evidence from the Hospital Industry," American Economic Review, American Economic Association, vol. 105(1), pages 172-203, January.
    3. Zack Cooper & Stuart V Craig & Martin Gaynor & John Van Reenen, 2019. "The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 51-107.
    4. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    5. Nicholas Bloom & Carol Propper & Stephan Seiler & John Van Reenen, 2015. "The Impact of Competition on Management Quality: Evidence from Public Hospitals," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 82(2), pages 457-489.
    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.
    7. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2016. "Health Care Exceptionalism? Performance and Allocation in the US Health Care Sector," American Economic Review, American Economic Association, vol. 106(8), pages 2110-2144, August.
    8. Nicholas Bloom & Christos Genakos & Raffaella Sadun & John Van Reenen, 2011. "Management Practices Across Firms and Countries," CEP Discussion Papers dp1109, Centre for Economic Performance, LSE.
    9. Office of Health Economics, 2007. "The Economics of Health Care," For School 001490, Office of Health Economics.
    10. Joseph Doyle & John Graves & Jonathan Gruber, 2019. "Evaluating Measures of Hospital Quality: Evidence from Ambulance Referral Patterns," The Review of Economics and Statistics, MIT Press, vol. 101(5), pages 841-852, December.
    11. Propper, Carol & Janke, Katharina & Sadun, Raffaella, 2019. "The Impact of CEOs in the Public Sector: Evidence from the English NHS," CEPR Discussion Papers 13726, C.E.P.R. Discussion Papers.
    12. Christopher Garmon, 2017. "The accuracy of hospital merger screening methods," RAND Journal of Economics, RAND Corporation, vol. 48(4), pages 1068-1102, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Gaynor & Kate Ho & Robert J. Town, 2015. "The Industrial Organization of Health-Care Markets," Journal of Economic Literature, American Economic Association, vol. 53(2), pages 235-284, June.
    2. Ari Bronsoler & John Van Reenen & Joseph Doyle, 2022. "The Impact of Health Information and Communication Technology on Clinical Quality, Productivity, and Workers," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 23-46, August.
    3. Ari Bronsoler & Joseph J. Doyle Jr. & John Van Reenen, 2021. "The Impact of Healthcare IT on Clinical Quality, Productivity and Workers," NBER Working Papers 29218, National Bureau of Economic Research, Inc.
    4. Anna Valero, 2021. "Education and management practices," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(2), pages 302-322.
    5. Johannes S. Kunz & Carol Propper & Kevin E. Staub & Rainer Winkelmann, 2023. "Assessing the Quality of Public Services: For-profits, Chains, and Concentration in the Hospital Market," Papers 2023-01, Centre for Health Economics, Monash University.
    6. Sivropoulos-Valero, Anna Valero, 2021. "Education and management practices," LSE Research Online Documents on Economics 114436, London School of Economics and Political Science, LSE Library.
    7. Saxell, Tanja & Nurminen, Mikko, 2020. "Physician Prices and Competition: Evidence from Acquisitions in the Private Health Care Sector," Working Papers 130, VATT Institute for Economic Research.
    8. Anna Valero, 2021. "Education and management practices," POID Working Papers 007, Centre for Economic Performance, LSE.
    9. Anne-Fleur Roos & Eddy van Doorslaer & Owen O'Donnell & Erik Schut & Marco Varkevisser, 2018. "Does price competition damage healthcare quality?," Tinbergen Institute Discussion Papers 18-040/V, Tinbergen Institute.
    10. 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.
    11. Mario BENASSI & Matteo LANDONI & Francesco RENTOCCHINI, 2017. "University Management Practices and Academic Spin-offs," Departmental Working Papers 2017-11, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    12. Bilicka, Katarzyna & Scur, Daniela, 2024. "Organizational capacity and profit shifting," Journal of Public Economics, Elsevier, vol. 238(C).
    13. Chiara Brouns & Rudy Douven & Ron Kemp, 2021. "Prices and market power in mental health care: Evidence from a major policy change in the Netherlands," Health Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 803-819, April.
    14. Amitabh Chandra & Amy Finkelstein & Adam Sacarny & Chad Syverson, 2013. "Healthcare Exceptionalism? Productivity and Allocation in the U.S. Healthcare Sector," NBER Working Papers 19200, National Bureau of Economic Research, Inc.
    15. Sandra McNally & Luis Schmidt & Anna Valero, 2024. "Do management practices matter in further education?," Economica, London School of Economics and Political Science, vol. 91(363), pages 740-769, July.
    16. Steven Berry & Martin Gaynor & Fiona Scott Morton, 2019. "Do Increasing Markups Matter? Lessons from Empirical Industrial Organization," Journal of Economic Perspectives, American Economic Association, vol. 33(3), pages 44-68, Summer.
    17. Elena Lucchese, 2024. "How important are delays in treatment for health outcomes? The case of ambulance response time and cardiovascular events," Health Economics, John Wiley & Sons, Ltd., vol. 33(4), pages 652-673, April.
    18. Karplus, Valerie J. & Geissmann, Thomas & Zhang, Da, 2021. "Institutional complexity, management practices, and firm productivity," World Development, Elsevier, vol. 142(C).
    19. Garthwaite, Craig & Ody, Christopher & Starc, Amanda, 2022. "Endogenous quality investments in the U.S. hospital market," Journal of Health Economics, Elsevier, vol. 84(C).
    20. Zack Cooper & Stuart V Craig & Martin Gaynor & John Van Reenen, 2019. "The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(1), pages 51-107.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehl:lserod:117852. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.