Multihospital Chain Acquisitions and Competition in Local Health Care Markets

Multihospital Chain Acquisitions and Competition in Local Health Care Markets This paper examines the determinants of multi-hospital acquisitions in California during a period of increased competition, 1984–1993. Evidence is examined for differences by chain type in acquisition preferences in the face of increased competitive pressure. Significant differences are found among chain types (for-profit, non-profit, and church). All three types appear to position themselves through acquisitions to obtain multiple-hospital holdings within local markets, with the non-profit type exhibiting the greatest tendency. Such positioning may enhance efficiency in payor contracting and increase market power, lowering competition in the long run. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Multihospital Chain Acquisitions and Competition in Local Health Care Markets

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 1997 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1007747713353
Publisher site
See Article on Publisher Site

Abstract

This paper examines the determinants of multi-hospital acquisitions in California during a period of increased competition, 1984–1993. Evidence is examined for differences by chain type in acquisition preferences in the face of increased competitive pressure. Significant differences are found among chain types (for-profit, non-profit, and church). All three types appear to position themselves through acquisitions to obtain multiple-hospital holdings within local markets, with the non-profit type exhibiting the greatest tendency. Such positioning may enhance efficiency in payor contracting and increase market power, lowering competition in the long run.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Sep 29, 2004

References

  • Cost Reductions or Reputation Enhancement as Motives for Mergers: The Logic of Multihospital Systems
    Dranove, D.; Shanley, M.
  • Uncertain Demand, the Structure of Hospital Costs, and the Cost of Empty Hospital Beds
    Gaynor, M.; Anderson, G.

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