impact wrenches
volume outcome and its impact on u.s. health care markets
the direction of causality matters for policy procedure . if volume causes outcome then policies supporting centralization of procedures in a few facilities may make sense . specialty hospitals may have the benefit of producing better outcomes . antitrust analysis of hospital mergers should probably consider any improved outcomes when evaluating the impact of the merger . accordingly the author analyzes the causality of the volume outcome relationship for coronary artery bypass grafts cabgs and finds that volume might play the crucial role for hospitals quality . this finding makes minimum volume requirements a reasonable policy which is shown by a simulation on californian data . however the primary focus of the finding lies in us antitrust application . due to a causative volume outcome relationship a hospital merger may have welfare enhancing effects despite possible price increases . patients will be better off as long as the quality improvement outweighs the loss of welfare due to the price increase . this is shown by a standard merger case simulation as well as a real merger which took place in california in 1999 . results suggest that the presence of a volume outcome relationship might serve as an efficiency defense at antitrust trials .