Hospital executives routinely tell regulators and the public that their systems need to merge to improve patient care. Some economists say not to believe it.
Carnegie Mellon’s Martin Gaynor reported in American Economic Journal that good old competition — not market concentration — actually can improve outcomes. In cases where hospitals can’t compete on price (in Britain, and among U.S. Medicare patients) they compete on quality instead. The difference can be measured in shorter hospital stays, fewer readmissions, and fewer deaths.