Working Paper: NBER ID: w17608
Authors: Martin Gaynor; Mauro Laudicella; Carol Propper
Abstract: The literature on mergers between private hospitals suggests that such mergers often produce little benefit. Despite this, the UK government has pursued an active policy of hospital merger. These mergers are initiated by a regulator, acting on behalf of the public, and justified on the grounds that merger will improve outcomes. We examine whether this promise is met. We exploit the fact that between 1997 and 2006 in England around half the short term general hospitals were involved in a merger, but that politics means that selection for a merger may be random with respect to future performance. We examine the impact of mergers on a large set of outcomes including financial performance, productivity, waiting times and clinical quality and find little evidence that mergers achieved gains other than a reduction in activity. In addition, mergers reduce the scope for competition between hospitals.
Keywords: hospital mergers; NHS; healthcare outcomes; public management; England
JEL Codes: I11; I18; L13; L32
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mergers (G34) | reduction in total hospital activity (I14) |
| mergers (G34) | decrease in financial performance (G32) |
| mergers (G34) | no significant increase in labor productivity (J89) |
| mergers (G34) | rise in waiting times (C41) |
| mergers (G34) | deterioration in clinical outcomes (I12) |