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Health Econ. 2019 Sep;28(9):1130-1145. doi: 10.1002/hec.3920. Epub 2019 Jul 1.

Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations.

Author information

1
Erasmus School of Health Policy & Management, Erasmus University Rotterdam, Rotterdam, Netherlands.
2
Erasmus School of Health Policy & Management, Erasmus University Rotterdam & Dutch Healthcare Authority, Utrecht, Netherlands.
3
Dutch Healthcare Authority, Utrecht, Netherlands.

Abstract

In most studies on hospital merger effects, the unit of observation is the merged hospital, whereas the observed price is the weighted average across hospital products and across payers. However, little is known about whether price effects vary between hospital locations, products, and payers. We expand existing bargaining models to allow for heterogeneous price effects and use a difference-in-differences model in which price changes at the merging hospitals are compared with price changes at comparison hospitals. We find evidence of heterogeneous price effects across health insurers, hospital products and hospital locations. These findings have implications for ex ante merger scrutiny.

KEYWORDS:

hospital merger; hospital-insurer bargaining; retrospective merger analysis

PMID:
31264329
DOI:
10.1002/hec.3920

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