Working Paper: NBER ID: w29449
Authors: Martin Gaynor; Adam Sacarny; Raffaella Sadun; Chad Syverson; Shruthi Venkatesh
Abstract: Despite the continuing US hospital merger wave, it remains unclear how mergers change, or fail to change, hospital behavior and performance. We open the “black box” of hospital practices through a mega-merger between two for-profit chains. Benchmarking the merger’s effects against the acquirer’s stated aims, we show they achieved some of their goals, harmonizing electronic medical records and sending managers to target hospitals. Post-acquisition managerial processes were similar across the merged chain. However, these interventions failed to drive detectable gains in performance. Our findings demonstrate the importance of organizations for merger research in health care and the economy more generally.
Keywords: hospital mergers; healthcare performance; managerial practices
JEL Codes: D22; I11; M12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| merger (G34) | EMR adoption (I18) |
| merger (G34) | clinical outcomes (I12) |
| merger (G34) | profitability (L21) |
| merger (G34) | quality of care (I11) |
| merger (G34) | decline in profitability of acquiring firm's hospitals (G34) |
| managerial interventions (M54) | improved outcomes (I14) |