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PRICE EFFECTS OF A MERGER: EVIDENCE FROM A PHYSICIANS' MARKET
Author(s) -
Koch Thomas,
Ulrick Shawn W.
Publication year - 2021
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/ecin.12954
Subject(s) - market power , economics , control (management) , power (physics) , competition (biology) , monetary economics , price setting , microeconomics , management , physics , quantum mechanics , monopoly , ecology , biology
The relationship between physician concentration and prices is of interest to policy makers, public health officials, and insurers. We examine how a merger of orthopaedic physicians in Berks County, Pennsylvania, affected prices. We use claims‐level data from three private payors in the region to compare the price changes of the merged practices to those in nearby areas plausibly not affected by the merger. The merged practices increased prices to two of the three payors by 10–20%, while prices in the control geographies remained largely unchanged, on average, suggesting prices increased due to postmerger increases in market power. ( JEL I13, K21, L4)