TY - JOUR
T1 - Hospital consolidation and negotiated PPO prices
AU - Capps, Cory
AU - Dranove, David
PY - 2004
Y1 - 2004
N2 - We examine the effects of hospital consolidation on the actual prices paid by preferred provider organizations. We find that price increases following consolidations among nearby hospitals invariably equaled or exceeded median price increases among other hospitals in the same market. Using multivariate regression analysis, we find that consolidation enables hospitals to increase prices in three of the four markets studied; these increases are generally statistically significant. In the remaining market, the measured effect was zero. Our results suggest that some, but not all, consolidations of competing hospitals facilitate price increases. We conclude that antitrust scrutiny of hospital consolidation is warranted.
AB - We examine the effects of hospital consolidation on the actual prices paid by preferred provider organizations. We find that price increases following consolidations among nearby hospitals invariably equaled or exceeded median price increases among other hospitals in the same market. Using multivariate regression analysis, we find that consolidation enables hospitals to increase prices in three of the four markets studied; these increases are generally statistically significant. In the remaining market, the measured effect was zero. Our results suggest that some, but not all, consolidations of competing hospitals facilitate price increases. We conclude that antitrust scrutiny of hospital consolidation is warranted.
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U2 - 10.1377/hlthaff.23.2.175
DO - 10.1377/hlthaff.23.2.175
M3 - Article
C2 - 15046141
AN - SCOPUS:1842729491
VL - 23
SP - 175
EP - 181
JO - Health affairs (Project Hope)
JF - Health affairs (Project Hope)
SN - 0278-2715
IS - 2
ER -