Mergers and Acquisitions in the Markets for Diagnostic Services: Evidence from the Finnish Private Health Care Sector

Mikko Nurminen

No 139, Discussion Papers from Aboa Centre for Economics

Abstract: Health care markets in developed countries have become increasingly concentrated, while at the same time there has been an increasing trend of mergers and acquisitions (M&As) in these markets. I study the impact of M&As in the diagnostic procedure market, a market that is an important part of the health care industry and patient care, but has received little attention in this context. I use detailed nationwide register data from the Finnish private health care sector. My difference-in-difference estimates show that M&As increased prices in blood tests in both the acquiring and acquired units, but not in X-rays and MRIs. I additionally estimate a patient demand model that reveals that prices have little impact on the choice of provider while the referring physician's influence is large, potentially contributing to the firms' ability to increase their price margins.

Keywords: Diagnostic Services; Mergers and Acquisitions; Market Power; Private Health Care (search for similar items in EconPapers)
JEL-codes: I11 J21 K21 L11 (search for similar items in EconPapers)
Pages: 58
Date: 2021-01
New Economics Papers: this item is included in nep-com, nep-cwa, nep-eur and nep-hea
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