Corporate investors are often credited with boosting target firm performance but criticized for prioritizing profits over consumer well-being. This tension is particularly evident in the healthcare sector, where information frictions contribute to underinvestment in quality. This paper finds that corporate ownership can improve healthcare outcomes in a setting where patients have access to service pricing
The post Corporate Ownership and Firm Performance: Evidence from Fertility Clinics appeared first on Marginal REVOLUTION.
Corporate investors are often credited with boosting target firm performance but criticized for prioritizing profits over consumer well-being. This tension is particularly evident in the healthcare sector, where information frictions contribute to underinvestment in quality. This paper finds that corporate ownership can improve healthcare outcomes in a setting where patients have access to service pricing and quality information – the market for In Vitro Fertilization (IVF). After acquisition by a fertility chain, clinic volume increases by 28.2%, and IVF success rates increase by 13.6%. Fertility chains also implement changes that enhance quality, benefit underperforming clinics, and expand the IVF market.
That is from a new paper by Amber La Forgia and Julia Bodner. Via the excellent Kevin Lewis.
The post Corporate Ownership and Firm Performance: Evidence from Fertility Clinics appeared first on Marginal REVOLUTION.
Medicine