HOSPITAL MARKETS AND COMPETITION - IMPLICATIONS FOR ANTITRUST POLICY

Antitrust and competitive issues are intertwined with efforts to control health care costs. Whether hospital competition holds down costs is an issue o much controversy and is the topic of this article. The findings are consistent with the hypothesis that hospitals compete primarily on a nonprice basis. This suggests that a more flexible application Of antitrust policy to hospital mergers will reduce cost increases and will improve efficiency. A step in this direction may be necessary if the managed care plans discussed by the Clinton administration create highly concentrated provider networks.