Market Power in Hospital Markets

In this thesis, we analyzed aspects of some important market failures that may hamper an appropriate functioning of the Dutch health care system: market power in the pro- vider market, and selection and consumer inertia in the insurance market.

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Chapter 2 tackled the issue of market power in the Dutch hospital market. Since merg- ers are the most important source of increased market concentration, and many mergers took place in the Dutch hospital market, it is essential to improve our understanding of how hospital mergers may affect market performance. My first research question was: For a merger between two neighboring hospitals in the Netherlands, do the prices in- crease after a merger and do we observe differential price changes between different hospital locations, different products and different insurers?


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