New Analysis Group Article Discusses Alternative Views of the Hypothetical Monopolist Test in Health Care Mergers

January 16, 2018

The definition of the relevant geographic market is widely recognized as a critical issue in the assessment of health care provider mergers. A key question in defining the relevant geographic market is whether a hypothetical monopolist would be able to raise prices by a small but significant non-transitory increase in price (SSNIP). In considering this question, it is common to focus on the impact of a hypothetical monopolization on a payor's walk-away price. Analysis Group Vice President Dov Rothman and Manager David Toniatti recently published an article on this topic, titled “Comment on 'The Flaws in Using the Hypothetical Monopolist Test from the 'Payor Perspective' in Health Care Merger Cases,' by Field, Fisher, and Coglianese.” The Analysis Group authors suggest that to fully model the hypothetical monopolization of a market – as well as a merger of providers – it may be necessary to account for the potential impact on both the payor's and provider's walk-away prices.

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