Examing the effect of hospital mergers on HMO hospital costs and premiums, 1995-2001

The Foundation's Changes in Health Care Financing and Organization program was designed to support research, demonstration, and evaluation projects examining major changes in health care financing. This grant provides support for researchers to examine the extent to which hospital consolidation was responsible for the resurgence of health care inflation in the late 1990s. They will identify the degree to which hospital consolidation has increased HMO hospital prices and HMO premiums, as well as the degree to which hospital consolidation is a function of HMO consolidation. The researchers will address the following questions: (1) how much hospital consolidation occurred from 1994 to 2001, why it occurred, and what was the effect of managed care organizations (MCOs) market structure on hospital consolidation; (2) how much of the increase in hospital per diem charges for MCO enrollees from 1994 to 2001 can be attributed to hospital consolidation; and (3) how much of MCO premium increases from 1994 to 2001 can be attributed to hospital consolidation? The researchers will link hospital data from the American Hospital Association and HMO data from InterStudy for the years from 1994 to 2001 across all health care markets in the United States. In addition, they will use HMO financial data from the Health Care Investment Analysts-HMO Database, Diskette Series, User's Manual. The objective of the study is to provide increased knowledge about the impact of market consolidation on federal and state agencies responsible for antitrust enforcement.

Grant Details

Amount Awarded $99,471.00

Awarded on: 2/20/2004

Time frame: 3/1/2004 - 2/28/2005

Grant Number: 50491


University of Minnesota School of Public Health

Mayo Mail Code 197
420 Delaware Street, S.E.
Minneapolis, 55455-0381


Robert J. Town
Project Director