Nonprofit Hospital Mergers: What can we Learn from Financial Markets?

Kenneth Danger

International Journal of the Economics of Business, 1997, vol. 4, issue 1, 63-69

Abstract: Antitrust challenges to hospital mergers have become increasingly common. Empirical studies of hospital prices and costs have generally utilized static measures of concentration and accounting data. This study avoids the difficulties that surround such approaches. Instead, this study seeks an answer to the question; what can we learn about nonprofit hospital mergers from capital market data? The results indicate that the effects of nonprofit hospital mergers are anti-competitive but also small. They cannot be distinguished from either zero or from the effects of profit-seeking mergers. However the results are precise enough to reject previous findings claiming that nonprofit hospital mergers lead to large price decreases.

Keywords: Nonprofit hospital mergers; Imperfect competition; Profits, JEL classification: 111, L31, L44, L13, (search for similar items in EconPapers)
Date: 1997
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DOI: 10.1080/758532194

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