The welfare consequences of hospital mergers
By: Robert Town...[et al.]
Contributors: Town, Robert J.; National Bureau of Economic Research.
Series: NBER working paper series -- no. 12244.; Working paper series (National Bureau of Economic Research) -- working paper no. 12244.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, Mass
Language: eng
Number of pages: 51
Subjects: Hospital mergers -- Econometric models; Public welfare -- Econometric models
Description: "In the 1990s the US hospital industry consolidated.  This paper estimates the impact of the wave of hospital mergers on welfare focusing on the impact on consumer surplus for the under-65 population.  For the purposes of quantifying the price impact of consolidations, hospitals are modeled as an input to the production of health insurance for the under-65 population.  The estimates indicate that the aggregate magnitude of the impact of hospital mergers is modest but not trivial.  In 2001, average HMO premiums are estimated to be 3.2% higher than they would have been absent any hospital merger activity during the 1990s.  In 2003, we estimate that because of hospital mergers private insurance rolls declined by approximately .3 percentage points or approximately 695,000 lives with the vast majority of those who lost private insurance joining the ranks of the uninsured.  Our estimates imply that hospital mergers resulted in a cumulative consumer surplus loss of over $42.2 billion between 1990 and 2001.  It is estimated that all but a modest $95.4 million of the loss in consumer surplus is transferred from consumers to providers"--National Bureau of Economic Research web site.
Notes: "May 2006"

Includes bibliographical references.

Also available in PDF from the NBER world wide web site (www.nber.org).