TY  - JOUR
AU  - Kessler,Daniel
AU  - McClellan,Mark
TI  - Designing Hospital Antitrust Policy to Promote Social Welfare
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6897
PY  - 1999
Y2  - January 1999
UR  - http://www.nber.org/papers/w6897
L1  - http://www.nber.org/papers/w6897.pdf
N1  - Author contact info:
Daniel Kessler
Hoover Institution
Stanford University
434 Galvez Mall
Stanford, CA  94305
Tel: 650/723-0596
E-Mail: fkessler@stanford.edu

Mark B. McClellan
Director, Engelberg Center for Health Care Reform
Senior Fellow, Economic Studies
Leonard .D. Schaeffer Director's Chair in
Health Policy ,The Brookings Institution
1775 Massachusetts avenue, N.W.
Washington, DC 20036
Tel: (202) 741-6567
Fax: NA
E-Mail: mmcclellan@brookings.edu
AB  - Applying principles of merger evaluation to the health care industry in general, and to hospital markets in particular, poses several unique challenges.  Definition of relevant geographic markets and assessment of the consequences of changes in competition for patient and social welfare are complicated by asymmetric information and moral hazard due to health insurance. We suggest a new empirical approach to assessing the impact of hospital competition which addresses the shortcomings of existing methods.  We then summarize our main results on the welfare consequences of competition.  We conclude with an illustration of how our methods can be used to assess the welfare implications of specific hospital mergers, and with some implications of our findings for antitrust policy.
ER  -