New Marketplace
New Risk, New Business Models

Myth: Antitrust Enforcers Block Many Hospital Mergers

Article · October 24, 2016

Leemore Dafny Slide: Myth: Antitrust Enforcers Block Many Hospital Mergers

Contested vs. Uncontested Hospital Acquisitions Click To Enlarge.

The federal antitrust authorities review a large number of hospital transactions each year, but they rarely challenge them. Two key takeaways of the above chart are:

  1. If your deal is contested by the authorities, in their view it violates competition laws, and that stance is not taken lightly or adopted frequently.
  2. Most deals will clear the Federal Trade Commission’s hurdle, so the hospital industry landscape will be largely determined by what hospital boards choose to do.

Mergers continue to close at a steady pace, notwithstanding the lack of quantitative, large-sample evidence of quality improvements and cost reductions from hospital mergers. The one result that continues to emerge from research studies is that mergers and market concentration tend to result in higher prices.

It’s important to appreciate that every merger is different, and some may well generate benefits that will be passed on to consumers. But boards shouldn’t assume that if the FTC fails to object, their merger is likely to fall in this category. Authorities place “guardrails” on the merger highway, but they don’t set the speed or direction of merging parties.


This post originally appeared in NEJM Catalyst on March 4, 2016.

Call for submissions:

Now inviting expert articles, longform articles, and case studies for peer review


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »

More From New Marketplace

What Is Risk Management in Healthcare?

Healthcare risk management comprises the systems and processes employed to uncover, mitigate, and prevent risks in healthcare institutions. Understand its purpose, elements, the risk manager’s role, and more.

ED Telehealth Express Care Service Patient Room

Revolutionizing the Delivery of Care for ED Patients

How the NYP OnDemand Emergency Department Telehealth Express Care Service reduced stay times and revisit rates in one year.

Targeting Unconscionable Prescription-Drug Prices — Maryland’s Anti–Price-Gouging Law

Why, in the early 21st century, are so many drugs that were cheaply available in the 20th century becoming prohibitively expensive?

The Economics of Indication-Based Drug Pricing

What would indication-based drug pricing accomplish?

Controlling the Cost of Medicaid

Both political parties should support policies that focus on incentives as a mechanism for improving and sustaining their value.

Resetting the Nation’s Health Care Quality Agenda

Poor measures of care quality have consequences. The National Quality Forum is essential to creating measures that are valid and reliable.

Untapped Business Opportunities for Entrepreneurs in Delivery System Reform

Opportunities for Private-Sector Entrepreneurship in Health Care Transformation

Two veterans of public service say that government can do only so much — which creates attractive business opportunities for entrepreneurs.

Moving Past the EHR Interoperability Blame Game

Why can't EHRs talk to one another? We never created the right incentives, but we pretend that we did.

Emerging from EHR Purgatory — Moving from Process to Outcomes

What's the effect of the mode of physician payment when it comes to EHRs?

Reframing Analytics: Transforming Insights into Action

Centralizing clinical data for an integrated delivery system revealed a surprising lesson: sometimes predictive analytics are not enough.


A weekly email newsletter featuring the latest actionable ideas and practical innovations from NEJM Catalyst.

Learn More »


Rating the Raters: An Evaluation of…

Some promising innovation is taking place among organizations that rate hospital performance, but major systemic…

Value Based Care

216 Articles

Physician Incentives: Importance of the Why

When moving health care providers forward in the world of value-based care and population health,…

Private Sector Pitfalls in U.S. Health…

Involving the private sector in Chinese health care could be beneficial, but a market only…

Insights Council

Have a voice. Join other health care leaders effecting change, shaping tomorrow.

Apply Now