Erwin A. Blackstone

Hospital mergers and antitrust: an economic analysis.

The hospital industry has recently experienced substantial merger activity. This paper examines several actual and proposed hospital mergers to determine the extent of competition in the affected markets and the effect these mergers may have on competition. Our focus is on mergers between hospitals in the same market. We define the relevant product and geographic market for hospitals, then develop criteria for evaluating hospital mergers and analyze several merger cases using these criteria. We conclude that these mergers threaten the competition that exists in most of the markets discussed, and that the claimed efficiency justification for mergers is not convincing.

The Condition of Surgery: An Analysis of the American College of Surgeons’ and the American Surgical Association’s Report on the Status of Surgery: [Introduction]

The supply of surgical services--a function of both the number of surgeons and the amount of surgery each performs--was extensively studied as a basis for new public policies in medical practice. The Report concludes that there is a surplus of physicians performing surgery and recommends restricting their number through more rigorous board certification and reducing the number of new entrants to specialized training. But the technological criteria advanced to assure quality are not based on adequate empirical evidence; and control by surgeons over their own numbers is likely to have uneven--and unfavorable--consequences for the public. The causes of surplus surgical capacity must be explained, and impediments to self-correction through competition in the medical market addressed in future policy.

Low price conspiracy: Trade regulation and the case of Japanese electronics

ConclusionThe analysis of low price conspiracy suggests that even if it were legal, it requires very special and uncommon conditions. Such conditions were not present in the U.S. television industry, and the Supreme Court correctly concluded that the evidence did not support the existence of a low price conspiracy involving Japanese television manufacturers. The Court indicated that persuasive actual cost evidence must be presented to overcome economic logic that predation is very unlikely. Predation can still be shown but the standard of proof is high. After all allegations of low price conspiracy may be more likely to limit competition than any actual low price conspiracy itself.

A Reply to the Comments on “The Condition of Surgery”

Any system of allocation of services works more efficiently in the consumers interest when there is competition among suppliers of the service. But this same competition reduces income and options of sellers. Professionals-as-sellers are likely to resist competition by restricting entry into their ranks and the range of qualities to be offered. An informed consumer should be allowed to exercise discretion in choosing among qualities and substitutions. Future policy might well incorporate less reliance on regulation and more on removing barriers to free market factors.