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      The Effects of Market Concentration and Horizontal Mergers on Hospital Costs and Prices

      Author(s): , ,
      Publication date Created:
      Publication date (Print):
      Journal: International Journal of the Economics of Business
      Publisher: Informa UK Limited

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          The impact of hospital market structure on patient volume, average length of stay, and the cost of care.

          J Robinson, H Luft (1985)
          A variety of recent proposals rely heavily on market forces as a means of controlling hospital cost inflation. Sceptics argue, however, that increased competition might lead to cost-increasing acquisitions of specialized clinical services and other forms of non-price competition as means of attracting physicians and patients. Using data from hospitals in 1972 we analyzed the impact of market structure on average hospital costs, measured in terms of both cost per patient and cost per patient day. Under the retrospective reimbursement system in place at the time, hospitals in more competitive environments exhibited significantly higher costs of production than did those in less competitive environments.
          Article 0 comments Cited 52 times – based on 0 reviews     Review now
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            The effects of market structure and bargaining position on hospital prices.

            Glenn A Melnick, Jack Zwanziger, Anil Bamezai … (1992)
            PPOs and HMOs have gained widespread acceptance due in part to the belief that excess capacity and competitive market conditions can be leveraged to negotiate lower prices with health care providers. We investigated prices obtained in different types of markets by the largest PPO in California. Our findings indicate that greater hospital competition leads to lower prices. Furthermore, as the importance of a hospital to the PPO in an area increases, the price rises substantially. Our testing of alternative methods for defining hospital geographic markets reveals that the common practice of using counties to define the market leads to an underestimate of the price-increasing effects of a merger.
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              The effects of hospital competition and the Medicare PPS program on hospital cost behavior in California.

              G Melnick, J Zwanziger (1988)
              Previous studies of hospital competition have found that greater competition leads to higher hospital costs. In this paper we report how the behavior of California's hospitals has changed since the introduction of programs intended to contain the rate of increase of hospital costs. Using data that cover the period preceding and following the introduction of these programs, we found that hospitals in more competitive markets have lowered their costs significantly.
              Article 0 comments Cited 36 times – based on 0 reviews     Review now
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                Author and article information

                Journal
                Title: International Journal of the Economics of Business
                Abbreviated Title: International Journal of the Economics of Business
                Publisher: Informa UK Limited
                ISSN (Print): 1357-1516
                ISSN (Electronic): 1466-1829
                Publication date Created: July 1998
                Publication date (Print): July 1998
                Volume: 5
                Issue: 2
                Pages: 159-180
                Article
                DOI: 10.1080/13571519884495
                SO-VID: f8d46f0c-eb6e-46a9-bfee-a7aedf7a2f10
                Copyright © © 1998
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