Estimation and Identification of Merger Effects: An Application to Hospital Mergers

Advances in structural demand estimation have substantially improved economists' ability to forecast the impact of mergers. However, these models rely on extensive assumptions about consumer choice and firm objectives, and ultimately observational methods are needed to test their validity. Observational studies, in turn, suffer from selection problems arising from the fact that merging entities differ from non-merging entities in unobserved ways. To obtain an accurate estimate of the effect of consummated mergers, I propose a combination of rival analysis and instrumental variables. By focusing on the effect of a merger on the behavior of rival firms, and instrumenting for these mergers, unbiased estimates of the effect of a merger on market outcomes can be obtained. Using this methodology, I evaluate the impact of independent hospital mergers between 1989 and 1996 on rivals' prices. I find sharp increases in rivals' prices following a merger, with the greatest effect on the closest rivals. The results for this industry are more consistent with predictions from structural models than with prior observational estimates.

Regulatory Exploitation and the Market for Corporate Controls

This paper investigates whether managers who fail to exploit regulatory loopholes are vulnerable to replacement. We use the U.S. hospital industry in 1985-1996 as a case study. A 1988 change in Medicare rules widened a pre-existing loophole in the Medicare payment system, presenting hospitals with an opportunity to increase operating margins by five or more percentage points simply by “upcoding” patients to more lucrative codes. We find that “room to upcode” is a statistically and economically significant predictor of whether a hospital replaces its management with a new team of for-profit managers. We also find that hospitals replacing their management subsequently upcode more than a sample of similar hospitals that did not, as identified by propensity scores.

Do Report Cards Tell Consumers Anything They Don't Already Know? The Case of Medicare HMOs

The use of government-mandated report cards to diminish uncertainty about the quality of products and services is widespread. However, report cards will have little effect if they simply confirm consumers' prior beliefs. Moreover, documented "responses" to report cards may reflect learning about quality that would have occurred in their absence ("market-based learning"). Using panel data on Medicare HMO market shares between 1994 and 2002, we examine the relationship between enrollment and quality before and after report cards were mailed to 40 million Medicare beneficiaries in 1999 and 2000. We find evidence that consumers learn from both public report cards and market-based sources, with the latter having a larger impact during our study period. Consumers are especially sensitive to both sources of information when the variance in HMO quality is greater. The effect of report cards is driven by beneficiaries' responses to consumer satisfaction scores; other reported quality measures such as the mammography rate did not affect enrollment decisions.

Temporal trends of groundwater levels in the border rivers alluvia

This report analyses the groundwater levels trends in the Queensland section of the Border Rivers alluvia (Macintyre and Weir Rivers), downstream of Goondiwindi to Mungindi. The aquifer in this area is rather thin and contains relatively salty water. Large portion of this area is currently utilized for irrigated and dryland cropping; storages and channels were erected to support the agriculture development. Deep-drainage and rising groundwater levels, which were identified in previous studies and were attributed to the agricultural activities, were re-investigated and constrained. Major findings are: • Stable groundwater levels at the outskirts of the floodplain; • On-going decrease in groundwater levels near Goondiwindi; • Induced streambed recharge during the 2010-2013 high flow period along several stream sections (but not in others); • Rising groundwater levels near many irrigated lands which were consistently associated with deep-drainage, in the order of 10-40 mm/yr; • Induced deep-drainage and leakiness under red-soils in two localities near South Talwood. It is recommended to increase monitoring frequency at those bores where dynamic changes were identified, especially where the groundwater level is very shallow

Groundwater flow model for the Lucky-Last spring group

Three springs clusters are located approximately 20km north-east of Injune, in the north-eastern margin of the Surat Basin (Fig. 1). These are: • The 'Lucky Last Springs' cluster (#230) with vents 287 and 340; • The 'Springrock Creek' cluster (#561) with vent 285; • The 'Abyss Springs' cluster (#592) with vents 285a, 285b and 286. The geological setting in the realm of these springs is complex, including a number of faults (marked in black in Figure 1) which may act as a preferential flow conduits and/or hydrogeological barrier to groundwater. This report summarizes an innovative modelling effort which aims to enhance the hydrogeological understanding of this area, with an emphasis on the springs flow mechanisms. The model was developed using FEFLOW platform due to its advance capabilities for (1) allows an unstructured grid, which increased flexibility around key areas of interest and larger cell sizes away for focus areas, (2) allows multi-level water tables, i.e., two or more phreatic aquifers, and (3) surface-subsurface interconnection

The perceptions of nurses regarding violence, strategies and support in a regional Queensland hospital

Ironically, the most violent workplace in Australia today is the healthcare in-dustry. Nurses encounter verbal and physical violence from patients and visitors in their workplace on a daily basis. Nurses who work in emergency and mental health departments are especially at risk of violence. The Australian media, such as television news reports and daily newspapers, frequently reports on incidents where violent pa-tients attack nurses—leaving the nurses with physical and emotional scars. Workplace violence is a significant cause of death and injury in many parts of the world, and in Australia alone the estimated cost of absenteeism and lost productiv-ity as a result of workplace violence is over $AUD 13 billion per year (Farrell, Bobrowski, & Bobrowski, 2006). Workplace violence in the healthcare industry is in-creasing, and has significant long-term consequences on both individuals and our health system. Violence affects nurses’ personal lives, mental health, safety and pro-fessionalism by reducing their ability to offer effective patient care. Experienced nurses are leaving the healthcare industry due to patient violence. There is a lack of qualitative Australian studies on nurses’ perceptions of work-place violence. In fact, there are no qualitative studies in Queensland, and only a few quantitative studies on workplace violence in Queensland hospitals and other healthcare sectors. However, no studies have been conducted on workplace violence in any of Queensland’s regional areas, or its prevalence within the Intensive Care Unit (ICU). My current research has investigated the issue of violence towards nurses in a regional public hospital of Queensland, and fills this gap in the literature. The Occu-pational Health Framework by Levin, Hewitt, and Misner (1998) assists in conceptu-alising the complex nature of workplace violence, and therefore was chosen to guide the investigation of my research questions, help with the data analyses and clarify the factors that contribute to assault injuries. My current doctoral research has contributed to the overall body of knowledge on workplace violence within the healthcare sector, as it examines nurses’ perceptions of physical and verbal violence perpetrated by patients and visitors, and the ensuing impact on nurses—including their ability to care for patients. My research also inves-tigates nurses’ perceptions of current workplace violence strategies and support services. I collected data using mixed methodology studies: a qualitative study of three focus group interviews of N=23 nurses, and a quantitative survey of N=98 nurses who work in three ‘high risk’ units: the Emergency Department (ED), Intensive Care Unit (ICU) and Mental Health Department (MHD) in a Queensland regional public hospi-tal, Australia. My findings expose high levels of workplace violence in these hospital depart-ments and the effect of workplace violence on nurses, witnesses and the interaction with patients. The findings describe the nurses’ perceptions and recommend improve-ments to manage violence and the support within the hospital, all of which aim to improve nurses’ work environments and quality of life. Implementing my research suggestions on hospital workplace safety and support services improvements would support nurse retention within the healthcare system, and ultimately, improve healthcare standards and patient wellbeing. The research could be expanded to include all the hospital departments in a regional public hospital, to provide clearer comparison between departments. Further recommendations might be wider studies of other public and private hospitals in re-gional, rural and metropolitan areas to get a better understanding of the extent of vio-lence in different locations

Evaluating the Impact of Health Insurance Industry Consolidation: Learning from Experience

Research shows consolidation in the private health insurance industry leads to premium increases, even though insurers with larger local market shares generally obtain lower prices from health care providers. Additional research is needed to understand how to protect against harms and unlock benefits from scale. Data on enrollment, premiums, and costs of commercial health insurance—by insurer, plan, customer segment, and local market—would help us understand whether, when, and for whom consolidation is harmful or beneficial. Such transparency is common where there is a strong public interest and substantial public regulation, both of which characterize this vital sector

Are Health Insurance Markets Competitive?

Although the vast majority of Americans have private health insurance, researchers focus almost exclusively on public provision. Data on the private insurance sector is extremely difficult to obtain because health insurance contracts are complex, renegotiated annually, and not subject to reporting requirements. This study makes use of a privately-gathered national database of insurance contracts agreed upon by a sample of large, multisite employers between 1998 and 2005. To gauge the competitiveness of the group health insurance industry, I investigate whether health insurers charge higher premiums, ceteris paribus, to more profitable firms. I find they do, and this result is not driven by cross-sectional differences across firms or plans: firms with positive profit shocks subsequently face higher premium growth, even for the same healthplans. Moreover, this relationship is strongest in geographic markets served by a small number of insurance carriers. Further analysis suggests profits act to increase employers' switching costs, and insurers exploit this inelasticity where they have sufficient bargaining power. Given the rapid industry consolidation during the study period, these findings suggest healthcare insurers possess and exercise market power in an increasing number of geographic markets.

How Do Hospitals Respond to Price Changes?

This paper investigates whether hospitals respond in profit-maximizing ways to changes in diagnosis-specific prices determined by Medicare's Prospective Payment System and other public and private insurers. Previous studies have been unable to isolate this response because changes in reimbursement amounts (prices) are typically endogenous: they are adjusted to reflect changes in hospital costs. I exploit an exogenous 1988 policy change that generated large price changes for 43 percent of all Medicare admissions. I find that hospitals responded to these price changes by upcoding' patients to diagnosis codes associated with large reimbursement increases, garnering $330-$425 million in extra reimbursement annually. This response was particularly strong among for-profit hospitals. With the important exception of elective diagnoses, I find little evidence that hospitals increased the intensity of care in diagnoses subject to price increases, where intensity is measured by total costs, length of stay, number of surgical procedures, and number of intensive-care-unit days. Neither did hospitals increase the volume of patients admitted to more remunerative diagnoses, notwithstanding the strong a priori expectation that such a response should prevail in fixed-price settings. Taken together, these findings suggest that, for the most part, hospitals do not alter their treatment or admissions policies based on diagnosis-specific prices; however they employ sophisticated coding strategies in order to maximize total reimbursement. The results also suggest that models of quality competition among hospitals may be inappropriate at the level of specific diagnoses ( products').