Replication data for: Mergers When Prices Are Negotiated: Evidence from the Hospital Industry
Principal Investigator(s): View help for Principal Investigator(s) Gautam Gowrisankaran; Aviv Nevo; Robert Town
Version: View help for Version V1
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Project Citation:
Gowrisankaran, Gautam, Nevo, Aviv, and Town, Robert. Replication data for: Mergers When Prices Are Negotiated: Evidence from the Hospital Industry. Nashville, TN: American Economic Association [publisher], 2015. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E112908V1
Project Description
Summary:
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We estimate a bargaining model of competition between hospitals and managed care organizations (MCOs) and use the estimates to evaluate the effects of hospital mergers. We find that MCO bargaining restrains hospital prices significantly. The model demonstrates the potential impact of coinsurance rates, which allow MCOs to partly steer patients toward cheaper hospitals. We show that increasing patient coinsurance tenfold would reduce prices by 16 percent. We find that a proposed hospital acquisition in Northern Virginia that was challenged by the Federal Trade Commission would have significantly raised hospital prices. Remedies based on separate bargaining do not alleviate the price increases. (JEL C78, G34, I11, I13, L13)
Scope of Project
JEL Classification:
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C78 Bargaining Theory; Matching Theory
G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
I11 Analysis of Health Care Markets
I13 Health Insurance, Public and Private
L13 Oligopoly and Other Imperfect Markets
C78 Bargaining Theory; Matching Theory
G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
I11 Analysis of Health Care Markets
I13 Health Insurance, Public and Private
L13 Oligopoly and Other Imperfect Markets
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