Gautam Gowrisankaran, University of Arizona
Grossman Lecture, Colby College
7:00 Ostrove Auditorium
In recent years, many hospitals have merged, increasing the concentration of hospital markets and raising concerns about the price and quality of care. How is hospital consolidation affecting the already high health care expenditures in the U.S.?
Because hospital competition for privately insured patients occurs through price negotiations between hospitals and insurers, an estimation of bargaining models is a useful tool to understand how hospital and insurer market structure affects prices and outcomes in this sector. This lecture analyzes what bargaining models imply about the outcomes of mergers in the hospital sector and how they are affecting the practice of antitrust policy for this sector. How should antitrust policies for hospitals best manage consolidation? When might hospital consolidation mean higher prices and when might it mean greater innovation?