For the greater Cincinnati area, the inpatient market shares of the largest five health systems (excluding pediatric care) are the following:

• The Christ Hospital: 10%
• University of Cincinnati Health: 14%
• TriHealth: 20%
• St Elizabeth: 14%
• Mercy Health: 22%

1. Calculate the Herfindahl-Hirschman Index (HHI)
2. Interpret the HHI value
3. What do you expect to be the effect of the across-state merger between Mercy Health (Ohio) and Bon Secours (Maryland) announced on Feb. 21^st 2018 on the market concentration in Cincinnati? Explain why.
4. Recalculate the HHI if The Christ Hospital and St Elizabeth merge and get a combined market share of 24%. What do you observe? Does it make sense? Explain.

Answer rating: 100% (QA)

To calculate the HerfindahlHirschman Index HHI you square the market share of each health system and ... View the full answer