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Quality-Enhancing Merger Efficiencies

Author: Roger D. Blair

Publisher:

Published: 2015

Total Pages: 0

ISBN-13:

The appropriate role of merger efficiencies remains unresolved in US antitrust law and policy. The Patient Protection and Affordable Care Act (ACA) has led to a significant shift in health care delivery. The ACA promises that increased integration and a shift from quantity of performance through increased competition will create a system in which quality will go up and prices will go down. Increasingly, due to the economic trends that respond to the ACA, including considerable consolidation both horizontally and vertically, it is imperative that the antitrust agencies provide an economically sound and administrable legal approach to efficiency enhancing mergers. In this regard, horizontal hospital mergers present particularly challenges for antitrust. Most hospital merger cases focus on cost based efficiencies, as does most of the academic empirical literature. Yet, government policy seems out of synch with quality analysis. This essay proceeds as follows. First, it provides a discussion of the welfare effects on quality and its implications for antitrust analysis. In the next part, the article explores quality analysis both in the 2010 Horizontal Merger Guidelines and in antitrust case law. In doing so, the essay identifies areas both of clarity and ambiguity regarding quality enhancing efficiencies policy. In the subsequent part, the essay draws parallels to an efficiency analysis of quality under rule of reason analysis, in which the essay offers examples of resale price maintenance and tying of franchising contracts. Thereafter, in the next part, the essay addresses how agencies and courts should treat quality efficiencies in mergers. In doing so, the essay draws upon the existing academic literature in empirical industrial organization economics and public health on measurements of what is hospital quality in a consolidating healthcare marketplace. In its concluding section, the essay advocates a more robust use of quality measurements as a guiding principle of merger law and policy that is flexible enough for case by case analysis and that will provide for ease of adminstrability and outcomes more in line with sound economic analysis than the current system.

Mergers in Higher Education

Author: Leon Cremonini

Publisher: Studera Press

Published: 2019-05-23

Total Pages: 336

ISBN-13: 9385883941

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The merger is broadly understood as a fusion of two or more units into one. The merger in higher education has received much attention by policy-makers as well as individual institutions in many countries as a means to bring higher education reforms. The merger of higher education institutions is a visible phenomenon in the recent past, but each merger provides a distinctive instance of major strategic change. Besides this, each merger also shows a distinct set of circumstances, actors, and characteristics. The aims of the mergers have been varied across the nations that include a reduction in fragmentation of institutions, economies of scale, enhanced efficiency, enhanced quality etc. Along with disapproval, a great amount of literature surrounding the benefits of the merger has emerged over the period of time. In spite of ample literature on mergers of higher education institutions, there does not appear to be a clear set of financial, efficiency or quality parameters to assess the success. The majority of the discussions have been narratives. In the available literature, the mergers have been classified based on their participants, stakeholders, nature, the strategy that drives them, their motivation, and/or the resultant degree of absorption. This book discusses the merger experiences and case study of different countries in terms of policies and practices. Each country chapter in the above context narrates that in planning the mergers, what have been the philosophical, economic, political, legal and cultural implications? How the factors such as institutional history, geographical distance, provincial tradition, state regulations, the presence of collective bargaining, and pertinent financial matters shaped the process as well as the outcome of the mergers? The idea of merger and its implementation (including process) at both government and institutional level have been discussed. The outcome assessment also forms the part of the discussion.

Incorporating Dynamic Efficiency Concerns in Merger Analysis

Author: Richard J. Gilbert

Publisher:

Published: 1994

Total Pages: 40

ISBN-13:

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Demand Side Merger Efficiencies

Author: David Reitman

Publisher:

Published: 2010

Total Pages: 0

ISBN-13:

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Mergers can generate demand side efficiencies that benefit customers in a number of ways, including procurement savings, transaction efficiencies, and quality improvements. We show that per-unit demand side efficiencies and marginal cost efficiencies of the same magnitude have an equivalent impact on the post-merger market in terms of output and welfare. Consequently, there is no reason to distinguish between marginal cost savings and demand side per-unit efficiencies when evaluating the impact of a merger. We demonstrate how various techniques for evaluating the impact of mergers - compensating marginal cost reductions, upward pricing pressure, and merger simulation - can be readily adapted to incorporate demand side as well as supply side efficiencies.

The Dichotomous Treatment of Efficiencies in Horizontal Mergers

Author: Nancy L. Rose

Publisher:

Published: 2020

Total Pages: 54

ISBN-13:

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Abstract: The extent to which horizontal mergers deliver competitive benefits that offset any potential for competitive harm is a critical issue of antitrust enforcement. This Article evaluates economic analyses of merger efficiencies and concludes that a substantial body of work casts doubt on their presumptive existence and magnitude. That has two significant implications. First, the current methods used by the federal antitrust agencies to determine whether to investigate a horizontal merger likely rests on an overly-optimistic view of the likely existence of cognizable efficiencies, which we label a “standard efficiency credit” that influences market concentration analysis. Second, criticisms of the current treatment of efficiencies as too demanding - for example, that antitrust agencies and reviewing courts require too much of merging parties in demonstrating the existence of efficiencies - are misplaced, in part because they fail to recognize that full-blown merger investigations and subsequent litigation are focused on the mergers that are most likely to cause harm.