Over the past two decades, mergers and acquisitions have reshaped the U.S. hospital sector. Since 2000, more than 1,300 mergers have occurred among roughly 5,000 hospitals nationwide.
To identify communities exposed to meaningful reductions in competition in hospital markets, we highlight transactions that fall into what we refer to as Red Zone Mergers. These are mergers that, according to the Department of Justice and Federal Trade Commission guidelines, are likely to raise prices by lessening competition.
We measure market concentration using the Herfindahl–Hirschman Index (HHI) – a standard antitrust metric that ranges from 0 (many small competitors, highly competitive) to 10,000 (a monopoly). Red Zone Mergers are those that produce a post-merger HHI above 1,800 via an increase of more than 100 points. These thresholds align with federal antitrust benchmarks used to identify potentially anticompetitive mergers.
About one-third of all mergers since 2000 have met these Red Zone Merger criteria.
