Description
- Abstract:
- Market power enables firms to restrict quantities and provide services to higher-paying consumers. We study this question using hospital mergers over the 2011 to 2022 period. Consistent with previous work, we find mergers lead to own-hospital reductions in staffing and patient volume, which are driven by decreases in lower-paying public patients. We also find decreases in births, which are heavily paid for by Medicaid. Where do these patients and providers go? We find corresponding increases in public payer volume, staffing, and procedure volume at non-merging neighboring hospitals. In addition, per-procedure discharge costs increase and operating margins decrease at non-merging hospitals. These increases in lower-paying patient populations and operating costs contribute to a nearly 40% increase in the likelihood of non-merging hospital exit. Overall, our collection of findings document how hospital mergers have understudied spillover effects on patient access to care and market stability.
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Citation
Daniel R. Arnold, Nandita Radhakrishnan, and Christopher Whaley,
"Foisted: The Spillover Effects of Hospital Mergers on Costs and Utilization"
(2025).
Center for Advancing Health Policy through Research (CAHPR) Digital Collection.
Brown Digital Repository. Brown University Library.
https://doi.org/10.26300/em9c-1t33
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Center for Advancing Health Policy through Research (CAHPR) Digital Collection
This collection contains research outputs produced by members of the Center for Advancing Health Policy through Research (CAHPR). Collection DOI: https://doi.org/10.26300/mshb-sp27...