WHICH TYPES OF HOSPITAL MERGERS SAVE CONSUMERS MONEY

This study analyzes the changes in costs and prices from 1986 to 1994 for more than 3,500 U.S. short-term general hospitals, including 122 h orizontal mergers. These mergers were generally financially beneficial to consumers, providing average price reductions of approximately 7 p ercent. Merger-related price reductions were considerably less in mark et areas with higher market concentration levels. Merger-related price reductions in areas with higher penetration by health maintenance org anizations (HMOs) were approximately twice those in areas with lower H MO penetration. Merger-related price reductions were greater for low-o ccupancy hospitals, nonteaching hospitals, nonsystem hospitals, simila r-size hospitals, and hospitals with greater premerger service duplica tion.