Hospital Market Consolidation and Efficiency: A Difference-in-Differences Assessment Using RAND Data

This project investigates whether hospital consolidation in the United States improved operational efficiency or expanded market power in the post-Affordable Care Act (ACA) and post-COVID era. Using RAND Hospital Data, which integrates Medicare Cost Reports and ownership information, a difference-in-differences framework compares financial performance before and after hospitals joined multihospital systems between 2019 and 2020. Outcomes include total, operating, and cash-flow margins, estimated using fixed-effects regressions with hospital-level clustered standard errors. The analysis finds small but statistically significant improvements in total and operating margins for hospitals that became chain-affiliated, suggesting modest efficiency gains rather than price inflation. This repository includes analytic scripts, dataset documentation, and output tables to ensure transparency and reproducibility. Data are provided under RAND’s institutional licensing agreement and are available upon request.