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Deborah Haas-Wilson and Christopher Garmon
Working Paper
Published In
International Journal of the Economics of Business

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-in-differences 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.