Nonprofit Hospital Mergers and the Exercise of Market Power

1995 ◽  
Vol 38 (2) ◽  
pp. 437-461 ◽  
Author(s):  
William J. Lynk
Keyword(s):  
Market Power ◽  
Hospital Mergers ◽  
Nonprofit Hospital

Antecedents of Hospital Ownership Conversions, Mergers, and Closures

2003 ◽  
Vol 40 (1) ◽  
pp. 39-56 ◽  
Author(s):  
Frank A. Sloan ◽  
Jan Ostermann ◽  
Christopher J. Conover
Keyword(s):  
Market Power ◽  
Profit Margin ◽  
Government Ownership ◽  
Hospital Ownership ◽  
Hospital Mergers ◽  
For Profit ◽  
Profit Status

This study assesses the determinants of conversions in hospital ownership from 1986 through 1996. To place such changes in context, we also analyze causes of hospital mergers and closures, which are often alternatives to hospital ownership conversion. A consistent result from our analysis is that an important antecedent of ownership conversions is a low profit margin. Conversions from private nonprofit or government ownership to for-profit status are preceded by chronically low margins and high debt-to-asset ratios. By contrast, conversions from for-profit ownership occur quickly following declines in margins. Many mergers seem motivated by a desire to increase market power—a consideration not evident for conversions.

Employer Consolidation and Wages: Evidence from Hospitals

2021 ◽  
Vol 111 (2) ◽  
pp. 397-427
Author(s):  
Elena Prager ◽  
Matt Schmitt
Keyword(s):  
Labor Market ◽  
Market Power ◽  
Labor Unions ◽  
Wage Growth ◽  
Hospital Mergers ◽  
Wage Effects

We test whether wage growth slows following employer consolidation by examining hospital mergers. We find evidence of reduced wage growth in cases where both (i) the increase in concentration induced by the merger is large and (ii) workers’ skills are industry-specific. In all other cases, we fail to reject zero wage effects. We consider alternative explanations and find that the observed patterns are unlikely to be explained by merger-related changes besides labor market power. Wage growth slowdowns are attenuated in markets with strong labor unions, and wage growth does not decline after out-of-market mergers that leave local employer concentration unchanged. (JEL G34, I11, J22, J24, J31, J42, R32)

Vertical Boilerplate

2017 ◽  
Author(s):  
James Gibson
Keyword(s):  
Market Power ◽  
Real World ◽  
Empirical Work ◽  
Full Scale ◽  
Market Mechanism ◽  
Law School ◽  
Information Cost ◽  
Information Costs ◽  
Policy Proposals ◽  
Radical Solution

Despite what we learn in law school about the “meeting of the minds,” most contracts are merely boilerplate—take-it-or-leave-it propositions. Negotiation is nonexistent; we rely on our collective market power as consumers to regulate contracts’ content. But boilerplate imposes certain information costs because it often arrives late in the transaction and is hard to understand. If those costs get too high, then the market mechanism fails. So how high are boilerplate’s information costs? A few studies have attempted to measure them, but they all use a “horizontal” approach—i.e., they sample a single stratum of boilerplate and assume that it represents the whole transaction. Yet real-world transactions often involve multiple layers of contracts, each with its own information costs. What is needed, then, is a “vertical” analysis, a study that examines fewer contracts of any one kind but tracks all the contracts the consumer encounters, soup to nuts. This Article presents the first vertical study of boilerplate. It casts serious doubt on the market mechanism and shows that existing scholarship fails to appreciate the full scale of the information cost problem. It then offers two regulatory solutions. The first works within contract law’s unconscionability doctrine, tweaking what the parties need to prove and who bears the burden of proving it. The second, more radical solution involves forcing both sellers and consumers to confront and minimize boilerplate’s information costs—an approach I call “forced salience.” In the end, the boilerplate experience is as deep as it is wide. Our empirical work should reflect that fact, and our policy proposals should too.

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