The Price Effects of Hospital Mergers: A Case Study of the Sutter-Summit Transaction

This consummated merger combined two hospitals located close together in the Oakland-Berkeley region of the San Francisco Bay Area. The greater metropolitan area contained many other hospitals that offered a similar range of services, but which were located farther away. A central issue raised by the Sutter-Summit transaction was whether travel costs were low enough such that these hospitals were a sufficient constraint on the merging parties to prevent an anticompetitive price increase. We use detailed claims data from three large health insurers to compare the post-merger price change for the merging parties to the price change for a set of control group hospitals. Our results show that Summit's price increase was among the largest of any comparable hospital in California, indicating this transaction may have been anticompetitive.

• | Author: Federal Trade Commission
• | Publisher: Createspace Independent Publishing Platform
• | Publication Date: Sep 25, 2014
• | Number of Pages: 30 pages
• | Binding: Paperback or Softback
• | ISBN-10: 1502493853
• | ISBN-13: 9781502493859