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Academic Articles Awards > Mergers

A Mixed Bag: Sorting Out Efficiencies Arguments in Hospital Mergers

Leigh Oliver and Robert Leibenluft, Antitrust, Vol. 30, No. 1, Fall 2015

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This article explores how the enforcement agencies and courts evaluate efficiencies commonly asserted in health care transactions. The health care industry has been particularly active in mergers and other types of consolidations. Many of these transactions do not raise serious antitrust issues—such as, for example, acquisitions involving small groups of physicians in geographic areas where there remain numerous competing physicians. The same is generally true for hospital mergers in separate geographic areas, although some observers suggest that mergers of hospitals in adjacent geographic markets could raise concerns under certain conditions. The focus here, however, will be on transactions raising more difficult antitrust issues—mergers of two or more hospitals in a concentrated geographic market or a hospital’s acquisition of physician groups or outpatient facilities (e.g., imaging centers) that compete with physicians or other services that the hospital already offers. These situations garner the most attention from the enforcers but also tend to have the greatest opportunity to generate efficiencies. It is in this context that the most difficult questions related to efficiencies arise.

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