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Mergers and Quality Provision in Healthcare: Evidence from Nursing Homes

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Listed:
  • Pinka Chatterji
  • Chun-Yu Ho
  • Wenqing Li

Abstract

This paper tests whether mergers between nursing home chains and independent facilities affect quality of care using facility-level data from 1999-2019. Staggered difference-in-differences estimates suggest that acquired facilities experience a 5% reduction in health deficiency citations 2 years post-merger. This improvement relies on the continuous supply of efficiency from chains; persists for four years; and is specific to mergers between chains and independent homes. Quality effects are driven by mergers involving smaller, higher-quality and non-private-equity-owned chains. A structural model suggests that the quality effect is generated by enhanced cost efficiency achieved by facilities serving larger numbers of residents after mergers.

Suggested Citation

  • Pinka Chatterji & Chun-Yu Ho & Wenqing Li, 2025. "Mergers and Quality Provision in Healthcare: Evidence from Nursing Homes," NBER Working Papers 33967, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33967
    Note: EH
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality

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