Effects of Horizontal Consolidation of Hospital Markets. Executive Summary, Final Report and Appendices A-F

摘要

The economic environment confronting the hospital industry changed dramatically during the 1980s due to reduced use of cost-based payment methods and reductions in inpatient admissions. The study evaluates the economic and organizational effects of hospital market consolidation that occurred between 1983 and 1988. Both market-level and institutional effects of hospital consolidation are examined including: (1) changes over time in the number of hospitals, hospital beds, and market concentration; (2) consolidation effects on community-level expenditures for hospital care and hospital revenue margins; (3) restructuring of services and governance that occurred at institutions that merged or consolidated; and (4) the factors that influenced hospital decisions to close, merge, be acquired, or make other organizational changes. Study findings suggest that health care reform should focus on medical insurance markets rather than hospital competition if hospital cost growth is to be contained. Theoretical and empirical results suggest that consumer insensitivity to health care prices were the key factor to cost growth.