The Anatomy of a Hospital System Merger: The Patient Did Not Respond Well to Treatment

40 Pages Posted: 8 Nov 2021 Last revised: 6 Dec 2021

See all articles by Martin Gaynor

Martin Gaynor

Carnegie Mellon University; National Bureau of Economic Research (NBER); Leverhulme Centre for Market and Public Organisation

Adam Sacarny

Columbia University

Raffaella Sadun

Harvard University - Strategy Unit; London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP); National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Chad Syverson

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Shruthi Venkatesh

Carnegie Mellon University

Multiple version iconThere are 3 versions of this paper

Date Written: November 2021

Abstract

Despite the continuing US hospital merger wave, it remains unclear how mergers change, or fail to change, hospital behavior and performance. We open the “black box” of hospital practices through a mega-merger between two for-profit chains. Benchmarking the merger’s effects against the acquirer’s stated aims, we show they achieved some of their goals, harmonizing electronic medical records and sending managers to target hospitals. Post-acquisition managerial processes were similar across the merged chain. However, these interventions failed to drive detectable gains in performance. Our findings demonstrate the importance of organizations for merger research in health care and the economy more generally.

Suggested Citation

Gaynor, Martin and Sacarny, Adam and Sadun, Raffaella and Syverson, Chad and Venkatesh, Shruthi, The Anatomy of a Hospital System Merger: The Patient Did Not Respond Well to Treatment (November 2021). NBER Working Paper No. w29449, Available at SSRN: https://ssrn.com/abstract=3958636

Martin Gaynor (Contact Author)

Carnegie Mellon University ( email )

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Adam Sacarny

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Raffaella Sadun

Harvard University - Strategy Unit ( email )

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Chad Syverson

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Shruthi Venkatesh

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