How to Get Away with Merger: Stealth Consolidation and its Effects on Us Healthcare

51 Pages Posted: 2 Jun 2020 Last revised: 10 Jul 2023

Date Written: May 2020

Abstract

US antitrust authorities are only notified of large mergers, so most transactions could escape antitrust scrutiny. I study premerger notification exemptions in the dialysis industry. I find that, in sharp contrast to reportable mergers, exempt ones almost completely avoid enforcement. As a result, exempt mergers increase concentration and reduce healthcare quality, as measured by hospitalization and mortality rates. I then estimate a structural model to simulate the equilibrium response of demand, quality, and enforcement to the elimination of exemptions. I find that the benefits of eliminating exemptions in the dialysis industry far exceed the costs.

Suggested Citation

Wollmann, Thomas, How to Get Away with Merger: Stealth Consolidation and its Effects on Us Healthcare (May 2020). NBER Working Paper No. w27274, Available at SSRN: https://ssrn.com/abstract=3615470

Thomas Wollmann (Contact Author)

University of Chicago

1101 East 58th Street
Chicago, IL 60637
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
169
Abstract Views
1,383
Rank
325,937
PlumX Metrics