Have mergers affected hospital activity in the english hospital sector

The main purpose of this paper is to investigate whether English Trusts that have merged are able to reconfigure their product mix offer more significantly than non-merged Trusts and achieve a relative advantage. We use a DID model in which we check whether being a merged Trust has a significant impact not only on the level but also on the composition of hospitals’ activity. Our data are annual and cover all acute and specialist Trusts in England for a period of 8 years starting in 2000/01. The dependent variable y is the level of activity and it is measured either by the total number of admitted patients, the total number of outpatient attendances or the total number of A&E attendances. Some control variables are included in the model to assess Trust-specific characteristics such as the average length of stay, the average number of available beds, the patient load, the competition between Trusts, the ownership status and the teaching status. Hospital mergers in England change both the level and the composition of Trusts’ activity, with merged Trusts offering a mix of services in favour of inpatient services, against less outpatient services. In terms of policy implications, these results suggest that the institution monitoring Trusts’ merging decisions (the Monitor for the Foundation Trusts and the Department of Health for all the other Trusts) should be very careful in giving authorisation to any hospital merger as this may have irreversible consequences in terms of services offered to the public.