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The Price Effects of Cross-Market Hospital Mergers

Leemore Dafny (Northwestern, Academic Affiliate), Kate Ho (Columbia), Robin Lee (Harvard)
March 18, 2016

Academic Affiliate and Northwestern University Professor Leemore Dafny coauthors a paper, “The Price Effects of Cross-Market Hospital Mergers,” with Kate Ho and Robin Lee.

The paper analyzes the effects that take place when hospitals spanning multiple markets and serving distinct patient populations merge. The authors show how these mergers can reduce competition among the merging providers for inclusion into insurers’ networks of providers, leading to higher prices. The results of the analysis suggest that cross-market, within-state hospital mergers appear to increase hospital systems’ leverage when bargaining with insurers. 

Read the paper.

On March 21, Dr. Dafny was featured in Marketplace, a radio program produced by American Public Media, in association with the University of Southern California titled “Hospital mergers within state borders drive up costs.”

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