Consolidations and closures: an empirical analysis of exits from the hospital industry.
This paper investigates the pre-exit characteristics of hospital mergers, acquisitions, and closures. We estimate competing risk hazard models using an 18-year national data set that spans the wave of closures in the 1980s and of mergers in the 1990s. Evidence shows that weak productivity of the hospital is a strong determinant for closures while competitive pressures are more influential in the decision to consolidate. Thus, increased market power, relative to cost reductions, appears to play a larger role in the merger decision. Our results also provide insight into possible correlations between mergers and closures.
Harrison
Teresa D
TD
Department of Economics, LeBow College of Business, Drexel University, Philadelphia 19104, USA. tharrison@drexel.edu
D017598:Efficiency, Organizational; D036262:Empirical Research; D006271:Health Facility Closure / Q000191:economics / Q000706:statistics & numerical data*; D006273:Health Facility Merger / Q000191:economics / Q000706:statistics & numerical data*; D006301:Health Services Needs and Demand / Q000191:economics*; D006302:Health Services Research; D006742:Hospital Bed Capacity; D006801:Humans; D007902:Length of Stay; D017059:Models, Econometric; D016016:Proportional Hazards Models; D012044:Regression Analysis; D014481:United States