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Consolidations and closures: an empirical analysis of exits from the hospital industry

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  • Teresa D. Harrison

Abstract

This paper investigates the pre‐exit characteristics of hospital mergers, acquisitions, and closures. We estimate competing risk hazard models using an 18‐year national data set that spans the wave of closures in the 1980s and of mergers in the 1990s. Evidence shows that weak productivity of the hospital is a strong determinant for closures while competitive pressures are more influential in the decision to consolidate. Thus, increased market power, relative to cost reductions, appears to play a larger role in the merger decision. Our results also provide insight into possible correlations between mergers and closures. Copyright © 2006 John Wiley & Sons, Ltd.

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  • Teresa D. Harrison, 2007. "Consolidations and closures: an empirical analysis of exits from the hospital industry," Health Economics, John Wiley & Sons, Ltd., vol. 16(5), pages 457-474, May.
    • Handle: RePEc:wly:hlthec:v:16:y:2007:i:5:p:457-474
    DOI: 10.1002/hec.1174
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    Cited by:

    1. Adam Pilny, 2014. "Mergers and Acquisitions in the German Hospital Market – Who are the Targets?," Ruhr Economic Papers 0518, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    2. Ko, Michelle & Derose, Kathryn Pitkin & Needleman, Jack & Ponce, Ninez A., 2014. "Whose social capital matters? The case of U.S. urban public hospital closures and conversions to private ownership," Social Science & Medicine, Elsevier, vol. 114(C), pages 188-196.
    3. Sriubaite, Ieva, 2021. "Who will be the mediator? Local politics and hospital closures in Germany," Ruhr Economic Papers 897, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    4. Pilny, Adam, 2014. "Mergers and Acquisitions in the German Hospital Market – Who are the Targets?," Ruhr Economic Papers 518, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Mas, Nuria & Valentini, Giovanni, 2012. "The importance of technology in the consolidation of hospital markets. The case of the United States," IESE Research Papers D/953, IESE Business School.
    6. repec:zbw:rwirep:0518 is not listed on IDEAS
    7. John R. Bowblis, 2011. "Ownership conversion and closure in the nursing home industry," Health Economics, John Wiley & Sons, Ltd., vol. 20(6), pages 631-644, June.
    8. Kollerup, Anna, 2022. "Worth the trip? The effect of hospital clinic closures for patients undergoing scheduled surgery," Social Science & Medicine, Elsevier, vol. 314(C).

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