CERGAS Seminar "The Impact of Hospital Mergers and Acquisitions: Evidence from Germany."

Hospital markets have been consolidating in many countries in the past decades. In this study, we examine the impact of hospital mergers and acquisitions in Germany, where prices are set at the federal level hence hospitals are expected to compete in other dimensions. We use patient-, hospital-, and market-level administrative datasets from 2012 to 2019 to analyze 210 hospital merger and acquisitions that occurred between 2013 and 2018 in Germany employing a staggered difference-in-differences framework. We assess the impact of mergers and acquisitions on both acquired hospitals and the hospital market. At the hospital level, we examine the quality of care, hospital finances, patient volume, and employment of medical staff. At the market level, we evaluate all-cause mortality rates, provision of services, and hospital utilization rates. Additionally, we analyze hospital closures as a counterfactual case in the market-level assessment.
At the hospital level, we find no evidence that quality of care declines for either emergency or elective cases following hospital mergers and acquisitions. In fact, quality of care improves significantly for acute myocardial infarction (AMI), appendectomy, and hip replacement. Hospital mergers and acquisitions result in higher net profits and increased payments to medical doctors per patient day. Additionally, patient volume increases overall, with the largest increase observed in admissions with low medical urgency.
At the county level, we find no evidence that hospital mergers and acquisitions affect all-cause mortality. However, hospital utilization rates decline in certain diagnostic categories in markets that experienced mergers, compared to markets with no changes in hospital ownership. We find that provision of geriatric services increase in markets affected by hospital mergers and acquisitions.
Our findings suggest that hospital mergers and acquisitions lead to improvements in the quality of emergency care, with no evidence of an adverse effect on the quality of care in hospitals. We observe small declines in hospital utilization rates for certain diagnoses, with no effect on all-cause mortality at the market level. The improvement in quality of care may, in part, be explained by increases in patient volume and efficiency wages.

Speaker:

Jonas Schreyögg is Professor for Health Care Management and Scientific Director of the Hamburg Center for Health Economics at the University of Hamburg. Prior to his current appointment he was Professor for Health Services Management at the University of Munich (2008-2010) and he was a Harkness Fellow at Stanford University from 2006-2007. He received several national and international research awards and served as a consultant to several international organizations e.g. WHO, the World Bank and OECD as well as to Governments. He is Deputy Chair of the German Council of Experts in Health and Care advising the Federal Minister of Health and the Federal Parliament.

Link zoom: https://unibocconi-it.zoom.us/j/95265644851?pwd=OF1AuhEXRBqP7Dpcn7EXcuJaZjgL4M.1

Meeting ID: 952 6564 4851

Passcode: 307614

Lunch at the end of the meeting: for those willing to participate in person, click here before the 9th of April.