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Why healthcare providers merge

Published online by Cambridge University Press:  09 May 2015

Jeroen Postma  and
Anne-Fleur Roos
Jeroen Postma*
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, The Netherlands
Anne-Fleur Roos
Affiliation:
Institute of Health Policy and Management, Erasmus University Rotterdam, Rotterdam, The Netherlands
*
*Correspondence to: Jeroen Postma, Institute of Health Policy and Management, Erasmus University Rotterdam, PO Box 1738, 3000 DR Rotterdam, The Netherlands. Email: postma@bmg.eur.nl
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Abstract

In many OECD countries, healthcare sectors have become increasingly concentrated as a result of mergers. However, detailed empirical insight into why healthcare providers merge is lacking. Also, we know little about the influence of national healthcare policies on mergers. We fill this gap in the literature by conducting a survey study on mergers among 848 Dutch healthcare executives, of which 35% responded (resulting in a study sample of 239 executives). A total of 65% of the respondents was involved in at least one merger between 2005 and 2012. During this period, Dutch healthcare providers faced a number of policy changes, including increasing competition, more pressure from purchasers, growing financial risks, de-institutionalisation of long-term care and decentralisation of healthcare services to municipalities. Our empirical study shows that healthcare providers predominantly merge to improve the provision of healthcare services and to strengthen their market position. Also efficiency and financial reasons are important drivers of merger activity in healthcare. We find that motives for merger are related to changes in health policies, in particular to the increasing pressure from competitors, insurers and municipalities.

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Type
Articles
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Health Economics, Policy and Law , Volume 11 , Issue 2 , April 2016 , pp. 121 - 140
Copyright
© Cambridge University Press 2015 

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