Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?

Washington University Olin WP No. OLIN-97-25

Posted: 9 Jun 1998

See all articles by Barton H. Hamilton

Barton H. Hamilton

Washington University, Saint Louis - John M. Olin School of Business

Vivian Ho

University of Alabama Birmingham, Health Care Orga

Date Written: June 1998

Abstract

Debate continues on whether consolidation in health care markets enhances efficiency and quality or instead facilitates collusion and market power. We address this issue by comparing the quality of patient care in hospitals before and after mergers and acquisitions which occurred in California between 1992 and 1995. We analyze inpatient mortality and length of stay for heart attack and stroke patients, 90-day readmission for heart attack patients, and discharge within 48 hours for normal newborn babies. The analysis indicates that recent mergers and acquisitions have not had a detrimental impact on inpatient mortality. Hospital consolidation has reduced length of stay and increased readmission rates in some cases, but not all. Concerns regarding the adverse consequences of increased market power on patient care require further substantiation.

JEL Classification: I11, I18

Suggested Citation

Hamilton, Barton H. and Ho, Vivian, Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients? (June 1998). Washington University Olin WP No. OLIN-97-25. Available at SSRN: https://ssrn.com/abstract=96853

Barton H. Hamilton (Contact Author)

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive, Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-8057 (Phone)
314-935-6359 (Fax)

HOME PAGE: http://www.olin.wustl.edu/faculty/hamiltonb/

Vivian Ho

University of Alabama Birmingham, Health Care Orga ( email )

RPHB 330 1530 3rd Ave. S.
Tuscaloosa, AL 35487
United States
(205) 975-0532 (Phone)
(205) 934-3347 (Fax)

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