Honors Projects

Abstract

Rising healthcare costs in the United States have intensified concerns about hospital consolidation and its effects on market competition. This paper examines the application of antitrust law to horizontal mergers involving hospitals and health insurers, focusing on how courts evaluate proposed mergers under Section 7 of the Clayton Act. Using a qualitative case study approach, the study analyzes eight major federal antitrust cases from the past two decades to determine how courts assess market concentration, competitive effects, and merger defenses.

The findings show that the Federal Trade Commission (FTC) and Department of Justice (DOJ) were successful in six of the eight cases examined. Government success was most closely associated with narrowly defined geographic markets, high levels of market concentration, and significant increases in the Herfindahl-Hirschman Index (HHI). Courts frequently relied on insurer testimony, patient flow data, and local market conditions to conclude that mergers would reduce competition and increase bargaining power over insurers. In contrast, the government was less successful when courts accepted broader market definitions or credited arguments that acquired hospitals were weakened competitors. Efficiency defenses were generally unsuccessful because courts found them speculative or insufficiently supported by evidence.

The analysis identifies several key doctrinal trends, including increased reliance on commercially realistic market definitions, the central role of insurers in assessing competition, and the continued strength of structural presumptions based on market concentration. Overall, the study concludes that antitrust enforcement remains an important tool for limiting anticompetitive healthcare consolidation, although outcomes depend heavily on market definition and the quality of economic evidence presented.

Department

Economics

Major

Philosophy, Politics, Economics and Law

Second Major

Economics

First Advisor

Walt Ryley

First Advisor Department

Economics

Second Advisor

Chuck Collins

Second Advisor Department

Marketing

Publication Date

5-31-2026

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