Thursday, September 27, 2018
Thomas Koch, Federal Trade Commission, Bureau of Economics and Shawn W. Ulrick U.S. Federal Trade Commission (FTC) examine Price Effects of a Merger: Evidence from a Physicians’ Market.
ABSTRACT: Physicians’ practices vary widely, as do their effectiveness and reimbursement. Using a merger of six orthopaedic groups in southeastern Pennsylvania, we find that such groups can generate large, anti-competitive price increases without any demonstrated increases in quality (indirectly measured by way of revealed preference) or efficiency. Further, we find that these price increases were targeted at certain beneficiaries, payors and codes, so any research design that omits care and billing along any of these dimensions is likely to be biased.