The healthcare industry has experienced a wave of mergers and acquisitions in recent years, many of which have been reactionary to either maintain or increase a company’s market power. This desire for market power I argue has caused the industry to enter a prisoner’s dilemma where the risks of M&A are not being properly assessed. This includes overleveraging, bankruptcy, and risk of becoming a target of another acquisition. Theory supports this idea with concepts like loss aversion and managerial pursuit of personal objectives. While the literature has supported this by showing M&A decreasing the market values of the company, and the price effect that M&A generates. This study uses an OLS model that tests for the existence and severity of a price effect post-M&A. The evidence shows that there is a price effect occurring in the acute-care sector and that action needs to be taken in order to stop the rising costs of healthcare.


Burnell, Barbara


Business Economics

Publication Date


Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis



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