The accuracy of hospital merger screening methods

• 成果类型: Article
• 署名作者: Garmon, Christopher
• 署名单位: University of Missouri System; University of Missouri Kansas City
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12215
• 发表日期: 2017
• 页码: 1068-1102
• 关键词: MARKET POWER; COMPETITION; industry; prices; simulations; performance; COSTS

摘要

This article analyzes the accuracy of various prospective hospital merger screening methods used by antitrust agencies and the courts. The predictions of the screening methods calculated with pre-merger data are compared with the actual post-merger price changes of 28 hospital mergers measured relative to controls. The evaluated screening methods include traditional structural measures (e.g., Herfindahl-Hirschman Index), measures derived from hospital competition models (e.g., diversion ratios, willingness-to-pay, and upward pricing pressure), and hospital merger simulation. Willingness-to-pay and upward pricing pressure are found to be more accurate at flagging potentially anticompetitive mergers for further investigation than traditional methods.