In the Shadow of Antitrust Enforcement: Price Effects of Hospital Mergers from 2009-2016

Abstract

We examine 558 hospital mergers during a period of increased antitrust enforcement. Using
US data on commercially insured patients from 2009-2016, we estimate an average price effect
of roughly 5% with a smaller effect for mergers later in the sample. Mergers between hospitals
that were substitutes for patients, in unconcentrated insurance markets, and less likely to lead
to efficiencies had higher price increases. Using administrative data on merger investigations, we
estimate higher than average price increases for mergers selected for more detailed investigation
and find no evidence of higher than average price increases for non-reportable mergers.

Keywords: Hospital Mergers, Antitrust Policy

JEL Classification: I, K, L