Two Hospital Mergers on Chicago’s North Shore: A Retrospective Study

Posted by D. Daniel Sokol

Deborah Haas-Wilson (FTC) and   Christopher Garmon (FTC) discuss Two Hospital Mergers on Chicago’s North Shore: A Retrospective Study in their latest working paper, one of a series of working papers to address hospital merger retrospectives.

ABSTRACT:  We provide an in-depth analysis of the price effects of two hospital mergers that occurred in the north shore suburbs of Chicago in early 2000: Evanston Northwestern Healthcare’s (ENH) purchase of Highland Park Hospital (HPH) and the merger of St. Therese Medical Center (STMC) and Victory Memorial Hospital (VMH). Using standard difference-indifferences methods with data from multiple sources, including health insurance data with actual transactions prices, we find that the ENH/HPH merger led to a large and statistically significant post-merger price increase. We find no evidence of a price increase after the STMC/VMH merger. These results are robust across data sources, control groups, and case mix adjustment methods.