Several theories of nonprofit hospital behavior predict that nonprofit hospitals behave in the consumer interest and thus do not exercise market power. If these theories are correct, then antitrust enforcement of hospital mergers should be restricted only to those markets in which a nonprofit hospital cannot offset anticompetitive behavior by for-profit hospitals. In this book, we measure a hospital's market power using two alternative measures. The first is the HHI for a county; the second is the distance from a hospital to its closest competitor. For both measures, we find that nonprofit hospitals set higher prices when they have more market power.

Abstract: Representatives of nonprofit hospitals have argued in recent merger cases that since nonprofit organizations are prohibited by law from distributing profits that nonprofit hospitals have less incentive to exercise market power than for-profit hospitals. This argument, referred to here as the "intent defense," implies that antitrust law should be applied more leniently in merger cases involving nonprofits. This dissertation examines the validity of this defense.

"[This book is] the most authoritative assessment of the advantages and disadvantages of recent trends toward the commercialization of health care," says Robert Pear of The New York Times. This major study by the Institute of Medicine examines virtually all aspects of for-profit health care in the United States, including the quality and availability of health care, the cost of medical care, access to financial capital, implications for education and research, and the fiduciary role of the physician. In addition to the report, the book contains 15 papers by experts in the field of for-profit health care covering a broad range of topicsâ€"from trends in the growth of major investor-owned hospital companies to the ethical issues in for-profit health care. "The report makes a lasting contribution to the health policy literature." â€"Journal of Health Politics, Policy and Law.

The health care industry is being transformed. Large firms are merging and acquiring other firms. Alliances and contractual relations between players in this market are shifting rapidly. Within the next few years, many markets are predicted to be dominated by a few large firms. Antitrust enforcement authorities like the Department of Justice and the Federal Trade Commission, as well as courts and legislators at both the federal and state levels, are struggling with the implications of these changes for the nature and consequences of competition in health care markets. In this paper, we summarize the nature of the changes in the structure of the health care industry. We will focus on the markets for health insurance, hospital services, and physician services. We will discuss the potential implications of the restructuring of the health care industry for competition, efficiency, and public policy. As will become apparent, this area offers a number of intriguing questions for inquisitive researchers.