Have mergers affected hospital activity in the English hospital sector?

Over the past fifteen years, there has been a distinct change in the NHS “market” in England with widespread merger activity taking place – in 1994 there were around 262 Trusts, reducing to 169 by 2008. The industrial economics literature applied to the healthcare market, offers a number of explanations about the driving forces behind merger activity and the impact of mergers on the performance of Trusts. In effect, Trusts may have used mergers as a strategic tool to improve their financial performance through price increases (made possible by increased market power) and/or cost reductions (made possible by either economies of scale and scope, monopsony power or favourable adjustments in the product mix), with important policy implications in terms of the quality of the service provided to the patients and the efficient use of available resources.