TY  - JOUR
AU  - Dafny, Leemore
AU  - Ho, Kate
AU  - Lee, Robin S
TI  - The Price Effects of Cross-Market Hospital Mergers
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 22106
PY  - 2016
Y2  - March 2016
DO  - 10.3386/w22106
UR  - http://www.nber.org/papers/w22106
L1  - http://www.nber.org/papers/w22106.pdf
N1  - Author contact info:
Leemore Dafny
Harvard Business School
Morgan Hall 247
Soldiers Field
Boston, MA 02163
Tel: 617/495-2416
E-Mail: ldafny@hbs.edu

Kate Ho
Princeton University
Department of Economics
237 Julis Romo Rabinowitz Building
Princeton, NJ 08544
E-Mail: kate.ho@princeton.edu

Robin S. Lee
Department of Economics
Harvard University
Littauer Center 120
Cambridge, MA 02138
Tel: 617-495-2997
E-Mail: robinlee@fas.harvard.edu
AB  - We consider the effect of mergers between firms whose products are not viewed as direct substitutes for the same good or service, but are bundled by a common intermediary. Focusing on hospital mergers across distinct geographic markets, we show that such combinations can reduce competition among merging hospitals for inclusion in insurers' networks, leading to higher prices (or lower-quality care). Using data on hospital mergers from 1996-2012, we find support that this mechanism operates within state boundaries: cross-market, within-state hospital mergers yield price increases of 7-9 percent for acquiring hospitals, whereas out of state acquisitions do not yield significant increases. 
ER  -