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Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations

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  • Anne‐Fleur Roos
  • Ramsis R. Croes
  • Victoria Shestalova
  • Marco Varkevisser
  • Frederik T. Schut

Abstract

In most studies on hospital merger effects, the unit of observation is the merged hospital, whereas the observed price is the weighted average across hospital products and across payers. However, little is known about whether price effects vary between hospital locations, products, and payers. We expand existing bargaining models to allow for heterogeneous price effects and use a difference‐in‐differences model in which price changes at the merging hospitals are compared with price changes at comparison hospitals. We find evidence of heterogeneous price effects across health insurers, hospital products and hospital locations. These findings have implications for ex ante merger scrutiny.

Suggested Citation

  • Anne‐Fleur Roos & Ramsis R. Croes & Victoria Shestalova & Marco Varkevisser & Frederik T. Schut, 2019. "Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations," Health Economics, John Wiley & Sons, Ltd., vol. 28(9), pages 1130-1145, September.
    • Handle: RePEc:wly:hlthec:v:28:y:2019:i:9:p:1130-1145
    DOI: 10.1002/hec.3920
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Jason Shafrin’s journal round-up for 9th September 2019
      by Jason Shafrin in The Academic Health Economists' Blog on 2019-09-09 11:00:23
    2. Academic Health Economist’s Blog: Journal Round Up
      by Jason Shafrin in Healthcare Economist on 2019-09-09 21:01:11

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    2. Chiara Brouns & Rudy Douven & Ron Kemp, 2021. "Prices and market power in mental health care: Evidence from a major policy change in the Netherlands," Health Economics, John Wiley & Sons, Ltd., vol. 30(4), pages 803-819, April.
    3. Charlotte Davies, 2020. "The supply side to procurement in a health market: competition and innovation in hip implants," Working Paper series, University of East Anglia, Centre for Competition Policy (CCP) 2020-01, Centre for Competition Policy, University of East Anglia, Norwich, UK..
    4. Davies, Charlotte & Davies, Stephen, 2021. "Assessing competition in the hip implant industry in the light of recent policy guidance," Social Science & Medicine, Elsevier, vol. 287(C).
    5. Mônica Viegas Andrade & Carolina Marinho & Letícia Nunes & Flavia Colares, 2024. "Price setting in the Brazilian private health insurance sector," International Journal of Health Economics and Management, Springer, vol. 24(1), pages 57-80, March.
    6. Roos, Anne-Fleur & O’Donnell, Owen & Schut, Frederik T. & Van Doorslaer, Eddy & Van Gestel, Raf & Varkevisser, Marco, 2020. "Does price deregulation in a competitive hospital market damage quality?," Journal of Health Economics, Elsevier, vol. 72(C).

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