Two Hospital Mergers on Chicago's North Shore: A Retrospective Study
U.S. Federal Trade Commission, Bureau of Economics Working Paper No. 294
64 Pages Posted: 15 Jan 2009
Date Written: January 13, 2009
Abstract
We provide an in-depth analysis of the price effects of two hospital mergers that occurred in the north shore suburbs of Chicago in early 2000: Evanston Northwestern Healthcare's (ENH) purchase of Highland Park Hospital (HPH) and the merger of St. Therese Medical Center (STMC) and Victory Memorial Hospital (VMH). Using standard difference-in-differences methods with data from multiple sources, including health insurance data with actual transactions prices, we find that the ENH/HPH merger led to a large and statistically significant post-merger price increase. We find no evidence of a price increase after the STMC/VMH merger. These results are robust across data sources, control groups, and case mix adjustment methods.
Keywords: Hospital, Antitrust, Merger
JEL Classification: I11, K21, L44, L80
Suggested Citation: Suggested Citation
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