Estimating the Impact of Hospital Consolidation on Employees Wages

There have been approximately 1,600 hospital mergers involving thousands of hospitals over the the 20 years. As a result, during the 2000s a majority of hospitals have either been directly involved in a merger or have been a neighbor to a merger. There is a growing evidence base that clearly illustrates that many hospital mergers raise prices and that, more generally, concentrated markets are associated with higher prices and lower clinical quality. While there has been research showing that hospital mergers raise prices, there has been no work that seeks to think about the broader ramifications of hospital consolidation on the local labor market and non-health outcomes. In this work, we study the “downstream” impacts of hospital mergers, and measure who – insurers, employers, or individuals - effectively pays for increases in hospital prices.