The Impact of Hospital Closures and Mergers on Patient Welfare

Abstract : We use data on a large wave of directed hospital mergers and closures in Ontario to investigate the impact of hospital reorganization on patient welfare. We estimate a model of patient hospital choice on data collected before the reorganization, finding that both distance and hospital quality are determinants of choice. The model is then used to simulate the short-run and long-run welfare impact of reorganization. Results suggest that cost savings and efficiency are not the only factors to consider when restructuring in settings where patients do not pay for services. Hospital access and quality must be considered.

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Centralized Procurement and Delivery Times: Evidence from a Natural Experiment in Italy

Abstract : We study how prices and delivery times respond to the statutory centralization of procurement. Our data set contains information on each purchase order of stan- dardized medical devices by all the hospitals in one Italian region. We estimate the effects of centralization in a difference-in-differences design leveraging the stag- gered implementation of the statutory centralization for a sub-set of medical devices. We document that centralization generated a trade-o between prices and delivery times. Centralized medical devices are 15% less expensive, but are delivered with slightly longer (20%) waiting time, compared to non-centralized devices. To learn more about the mechanism we match purchase orders with contract level data, and nd that the reduction in prices might be associated to bulk purchasing from a limited sub-set of suppliers.

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Deregulation, Market Power, and Prices: Evidence from the Electricity Sector

Abstract : When deciding whether to introduce market-based prices into a regulated market, a regulator faces the following tradeoff: profit incentives may reduce costs through the more efficient allocation of resources, but the presence of market power may lead to increased markups. We use a detailed dataset on electricity transactions to investigate the impact of market-based deregulation in the context of the U.S. electricity sector. We find that the increase in markups dominates despite modest efficiency gains, leading to higher prices to consumers. Deregulation does not necessarily lead to lower prices to consumers. A consumer-oriented regulator may prefer to regulate rates to be consumer friendly, rather than let prices be subject to market power.

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