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Price effects of a hospital merger: Heterogeneity across health insurers, hospital products, and hospital locations
Author(s) -
Roos AnneFleur,
Croes Ramsis R.,
Shestalova Victoria,
Varkevisser Marco,
Schut Frederik T.
Publication year - 2019
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.3920
Subject(s) - scrutiny , ex ante , business , unit (ring theory) , actuarial science , economics , psychology , political science , law , macroeconomics , mathematics education
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.