Excellent from the very sharp Elena Prager and Matt Schmitt down at UCLA and out by Lake Michigan. Hospital mergers appear to be as much about gaining market power with respect to health-care workers as about gaining market power with respect to patients and their insurers.There continues to be very little evidence that they are about efficiencies of any kind: Elena Prager and Matt Schmitt: Employer Consolidation and Wages: Evidence from Hospitals: "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 at least somewhat industry-specific. Following such mergers, annual wage growth is 1.1pp slower for skilled non-health professionals and 1.7pp slower for nursing and pharmacy workers than in markets without mergers.... Observed patterns are unlikely to be explained by merger-related changes aside from labor market power. Wage growth slowdowns appear to be attenuated in markets with strong labor unions, and we do not observe reduced wage growth after out-of-market mergers that leave employer concentration unchanged...
#noted
