More from the Author

• Article | RAND Journal of Economics | Summer 2019

  The Price Effects of Cross-Market Mergers: Theory and Evidence from the Hospital Industry

  Leemore S. Dafny, Katherine Ho and Robin S. Lee

  We consider the effect of mergers between firms whose products are not viewed as direct substitutes for the same good or service but are bundled by a common intermediary. Focusing on hospital mergers across distinct geographic markets, we show that such combinations can reduce competition among merging hospitals for inclusion in insurers' networks, leading to higher prices (or lower-quality care). Using data on hospital mergers from 1996 to 2012, we find support that this mechanism operates within state boundaries: cross-market, within-state hospital mergers yield price increases of 7%–9% for acquiring hospitals, whereas out-of-state acquisitions do not yield significant increases.

  Keywords: Mergers and Acquisitions; Markets; Geographic Scope; Price; Outcome or Result; Insurance; Health Industry;

  Citation:

  Dafny, Leemore S., Katherine Ho, and Robin S. Lee. "The Price Effects of Cross-Market Mergers: Theory and Evidence from the Hospital Industry." RAND Journal of Economics 50, no. 2 (Summer 2019): 286–325.  View Details

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• Working Paper | 2019

  Treatment for Commercially Insured Patients with Opioid Use Disorder in the U.S.: What Are We Doing, and What Should We Be Doing?

  Leemore S. Dafny, Karen Shen and Eric Barrette

  Keywords: Health Care and Treatment; Health Disorders; Health Industry; United States;

  Citation:

  Dafny, Leemore S., Karen Shen, and Eric Barrette. "Treatment for Commercially Insured Patients with Opioid Use Disorder in the U.S.: What Are We Doing, and What Should We Be Doing?" Working Paper, April 2019.  View Details

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• Article | Health Affairs

  Decreases In Readmissions Credited to Medicare's Program to Reduce Hospital Readmissions Have Been Overstated

  Christopher Ody, Lucy Msall, Leemore S. Dafny, David Grabowski and David Cutler

  Medicare’s Hospital Readmissions Reduction Program (HRRP) has been credited with lowering risk-adjusted readmission rates for targeted conditions at general acute care hospitals. However, these reductions appear to be illusory or overstated. This is because a concurrent change in electronic transaction standards allowed hospitals to document a larger number of diagnoses per claim, which had the effect of reducing risk-adjusted patient readmission rates. Prior studies of the HRRP relied upon control groups’ having lower baseline readmission rates, which could falsely create the appearance that readmission rates are changing more in the treatment than in the control group. Accounting for the revised standards reduced the decline in risk-adjusted readmission rates for targeted conditions by 48 percent. After further adjusting for differences in pre-HRRP readmission rates across samples, we found that declines for targeted conditions at general acute care hospitals were statistically indistinguishable from declines in two control samples. Either the HRRP had no effect on readmissions, or it led to a system-wide reduction in readmissions that was roughly half as large as prior estimates have suggested.

  Keywords: readmission rates; Hospitals; acute care hospitals; Medicare; myocardial infarction; heart failure; Health Care and Treatment;

  Citation:

  Ody, Christopher, Lucy Msall, Leemore S. Dafny, David Grabowski, and David Cutler. "Decreases In Readmissions Credited to Medicare's Program to Reduce Hospital Readmissions Have Been Overstated." Health Affairs 38, no. 1 (January 2019): 36–43.  View Details

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