Mergers When Prices Are Negotiated: Evidence from the Hospital Industry

• 成果类型: Article
• 署名作者: Gowrisankaran, Gautam; Nevo, Aviv; Town, Robert
• 署名单位: University of Arizona; Universite de Montreal; HEC Montreal; National Bureau of Economic Research; Northwestern University; University of Pennsylvania
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20130223
• 发表日期: 2015
• 页码: 172-203
• 关键词: CABLE-TELEVISION INDUSTRY; MEDICAL-CARE MARKET; differentiated products; health-insurance; automobile-industry; Bargaining power; moral hazard; COMPETITION; equilibrium; incentives

摘要

We estimate a bargaining model of competition between hospitals and managed care organizations (MCOs) and use the estimates to evaluate the effects of hospital mergers. We find that MCO bargaining restrains hospital prices significantly. The model demonstrates the potential impact of coinsurance rates, which allow MCOs to partly steer patients toward cheaper hospitals. We show that increasing patient coinsurance tenfold would reduce prices by 16 percent. We find that a proposed hospital acquisition in Northern Virginia that was challenged by the Federal Trade Commission would have significantly raised hospital prices. Remedies based on separate bargaining do not alleviate the price increases.