In the Shadow of Antitrust Enforcement: Price Effects of Hospital Mergers from 2009 to 2016

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We examine 558 hospital mergers during a period of increased antitrust enforcement. Using US data on commercially insured patients from 2009 to 2016, we estimate an average price effect of roughly 5 percent, with a smaller effect for mergers later in the sample period. Mergers between hospitals that were substitutes for patients, were in unconcentrated insurance markets, and were less likely to lead to efficiencies had higher price increases. Using administrative data on merger investigations, we estimate higher-than-average price increases for mergers selected for more detailed investigation and find no evidence of higher-than-average price increases for nonreportable mergers.

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