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Hospital mergers: who merges with whom?

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Abstract:

Merger pairings are categorized based on the ownership status, teaching status, hospital size, caseload severity, and geographical distance of merging hospitals to determine the types of hospitals that tend to merge with each other. The results show that mergers between two non-teaching, nonprofit or for-profit hospitals occur more often, but that only ownership status, not teaching status, affects the propensity to merge after controlling for other merger pair characteristics. This paper also finds that hospitals are more likely to merge with a partner of similar size and close geographical proximity, but not necessarily the closest candidate. However, ownership status, not distance between hospitals, is the dominant determinant of merger pairs.

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036840500395360

Affiliations: Department of Economics and International Business, LeBow College of Business, Drexel University, 32nd & Market St, Philadelphia, PA 19104, USA

Publication date: April 10, 2006

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