Markups and Mergers in the US Hospital Industry

Jan De Loecker and Sebastian Fleitas

No 21938, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: In this paper, we construct a hospital-level panel dataset covering the entire US hospital industry over the period 1996-2018. Using detailed hospital-level expenditure and revenue data, we measure hospital level markups and document industry-wide increasing markups of about 17 percent. We relate markups to merger activity acrosshospital markets, and we find a strong association between markups and mergers at the market level. In particular, we find that mergers, on average, explain about 3 of the 17 percent increase in markups over our sample period. Our results indicate that market level markups do not increase due to reallocation of market shares to higher markup hospitals, rather by an increase of markups at hospitals involved in mergers. We confirm that hospital system-wide mergers are the main factor driving the estimated merger-markup association; hereby strengthening the merged system’s ability to negotiate prices with insurers.

Keywords: Markups (search for similar items in EconPapers)
JEL-codes: L11 (search for similar items in EconPapers)
Date: 2026-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP21938 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:21938

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP21938

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().