Countervailing Market Power and Hospital Competition

• 成果类型: Article
• 署名作者: Barrette, Eric; Gowrisankaran, Gautam; Town, Robert
• 署名单位: Medtronic; Columbia University; Centre for Economic Policy Research - UK; National Bureau of Economic Research; University of Texas System; University of Texas Austin
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_01020
• 发表日期: 2022-11
• 页码: 1351-1360
• 关键词: insurer; prices; mergers; share

摘要

While economic theories indicate that market power by downstream firms can potentially counteract market power upstream, antitrust policy is opaque as to whether to incorporate countervailing market power in merger analyses. We use detailed national claims data from the health care sector to evaluate whether countervailing insurer power does indeed limit hospitals' exercise of market power. We estimate willingness-to-pay models to evaluate hospital market power across analysis areas. We find that countervailing market power is important: a typical hospital merger would raise hospital prices 4.3% at the 25th percentile of insurer concentration but only 0.97% at the 75th percentile of insurer concentration.