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Research Article
Consolidations and closures: an empirical analysis of exits from the hospital industry
Article first published online: 9 OCT 2006
DOI: 10.1002/hec.1174
Copyright © 2006 John Wiley & Sons, Ltd.
1099-1050/asset/cover.gif?v=1&s=af8abe1b1dd6990bc2f6af06e451153b7d74332a "Health Economics")
Additional Information
How to Cite
D. Harrison, T. (2007), Consolidations and closures: an empirical analysis of exits from the hospital industry. Health Econ., 16: 457–474. doi: 10.1002/hec.1174
Publication History
- Issue published online: 11 APR 2007
- Article first published online: 9 OCT 2006
- Manuscript Accepted: 27 JUL 2006
- Manuscript Received: 25 APR 2005
Funded by
- Social Science Research Council
- Abstract
- References
- Cited By
Keywords:
- hospital;
- merger;
- closure;
- duration analysis
Abstract
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. Copyright © 2006 John Wiley & Sons, Ltd.