Hospitals in the United States increasingly belong to multihospital systems that operate in numerous geographic markets. A large literature in management and economics suggests that competition between firms may be softened as a result of multimarket contact—ie., firms competing with one another in multiple markets simultaneously. Exploiting plausibly exogenous variation in multimarket contact generated by out-of-market consolidation, I find that increases in multimarket contact over the 2000–2010 period led to higher hospital prices. These results suggest that continued hospital consolidation may produce higher prices even if that consolidation only minimally affects within-market concentration.
"Multimarket Contact in the Hospital Industry."
American Economic Journal: Economic Policy,
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Corporate Finance and Governance: Government Policy and Regulation
Analysis of Health Care Markets
Health: Government Policy; Regulation; Public Health
Monopolization; Horizontal Anticompetitive Practices