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Evaluating Substitutes for Federal Antitrust: The Case of COPAs

Author

Listed:
  • Seungwhan Chun
  • Marco Duarte
  • Cici McNamara
  • Jason M. Lindo

Abstract

Are state-imposed behavioral remedies effective substitutes for federal antitrust enforcement? We evaluate state regulation of hospital mergers under Certificates of Public Advantage (COPAs). Using hospital data from 1996-2022, we compare COPA-regulated mergers to unregulated mergers with similar anticompetitive potential. In highly concentrated markets, COPA mergers result in 11.1 p.p. lower price growth but 0.5 p.p. greater increases in 30-day mortality rates. We find a negative correlation between price and mortality effects for COPA mergers, consistent with theoretical predictions that binding price caps exacerbate quality deterioration. Our findings suggest that COPA contracts are poor substitutes for traditional antitrust enforcement.

Suggested Citation

  • Seungwhan Chun & Marco Duarte & Cici McNamara & Jason M. Lindo, 2025. "Evaluating Substitutes for Federal Antitrust: The Case of COPAs," NBER Working Papers 34373, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:34373
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    More about this item

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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