Earlier this month, a powerhouse team of health economists looked at quality outcomes for hospital mergers. The results were impressive for policy purposes but quite depressing:
Kicking off the decade with a paper on hospital mergers in @NEJM https://t.co/cE7GvA1E20 We know mergers increase prices. What do we get in return? We find no evidence of quality improvement & worsening in patient experiences. Put that together: mergers=bad for patients on avg https://t.co/r6t1G6eRbD
— Michael McWilliams (@JMichaelMcW) January 2, 2020
We could conceivably be willing to pay more if we, as a society and patients, get better quality services and outcomes.
We could be willing to pay more if we get a better experience for the same outcomes.
Those are plausible improvements that may be worth paying more for.
However this study is not finding those types of improvements. So what is happening? Are these mergers mostly about market power and building moats to enable the collection of rent? That is one hell of a plausible interpretation that has not been disproven yet.