When Bigger Means Slower: Hospital Mergers and Waiting Times

Long waiting times have become one of the defining challenges of modern healthcare systems: in 2024 the share of patients waiting more than three months was 47% and 58% for cataract surgery and hip

replacement, respectively (OECD, 2025).

In some publicly funded health systems with universal coverage, such as the English National Health Service (NHS), the Italian Servizio Sanitario Nazionale, or the Spanish Sistema Nacional de Salud, excessive delays may lead some patients to opt for private treatment, if they can afford out-of-pocket payments or have private health insurance. Others, however, may forgo treatment altogether, either postponing care indefinitely or abandoning it entirely. Such dynamics raise important concerns regarding equity in access to care (OECD, 2020).

Where prices are administratively set and do not clear the market, as in NHS-type systems, governments

have introduced market-oriented reforms, designed to stimulate providers’ competition within publicly

funded healthcare systems, to tackle the problem of excessively long waiting times. One example is the

internal market in the English National Health Service (NHS), where hospital competition is fostered

through a combination of patient choice and activity-based funding.

The internal market, introduced by the National Health Service and Community Care Act 1990, separated purchasers and providers within the English NHS with the aim of improving efficiency and quality through competition. However, rather than competing, hospital providers increasingly coordinated their activities, leading to service concentration and, eventually, formal mergers. As a result, the number of hospitals declined, giving rise to fewer and larger organizations, and weakening the competitive pressures envisaged by the reform (Table 1). Several waves of hospital consolidation have significantly reduced the number of providers operating in England by 26%, each serving on average a population of 245,000 people in 2000 to each serving on average a population of 450,000 people in 2020. Most of these consolidations in the form of hospital mergers are attributable to the internal market reform (years 2000-2004).

Table 1. Hospitals and hospital mergers. England, 2000–2018.

Year	Number of hospital mergers	Number of hospitals
2000-2001	0	194
2001-2002	11	183
2002-2003	10	172
2003-2004	3	169
2004-2005	0	169
2005-2006	0	169
2006-2007	1	168
2007-2008	2	166
2008-2009	0	166
2009-2010	1	165
2010-2011	0	165
2011-2012	1	164
2012-2013	4	159
2013-2014	0	159
2014-2015	2	157
2015-2016	4	153
2016-2017	1	152
2017-2018	2	150
2018-2019	3	147
2019-2020	2	144

In response, the government in the 2000s promoted outsourcing and greater private sector involvement -most notably through the NHS Plan (2000) --with the goal of restoring competition and reducing waiting times (Figure 1).

Figure 1. Waiting times and waiting lists. England, 2000-2018.

The evolution of waiting times in England should be interpreted in light of major institutional reforms. Among others, the National Health Service Reform and Health Care Professions Act 2002 introduced explicit waiting time targets for elective care, progressively reducing the maximum time between referral and treatment from over 18 months to 18 weeks. The sharp decline in waiting times observed in Figure 1 is closely associated with this policy intervention and the strong performance management framework that accompanied it.

As in markets for other goods or services, hospital mergers may generate efficiency gains through increased productivity, improved organization of service provision, economies of scale, or enhanced resource allocation. However, they may also increase market concentration and weaken competitive pressures by increasing bargaining power and strengthening monopoly power in local markets. Both channels are likely to have significant and potentially offsetting effects on waiting times.

As waiting times in publicly funded healthcare systems do not merely reflect operational performance but also constitute the primary mechanism through which scarce resources are allocated, merger-induced changes in waiting times extend beyond efficiency considerations. If waiting times increase, higher-income patients may substitute toward private care, while lower-income patients remain in the public queue, and some individuals may postpone or forgo treatment altogether. The merger model therefore carries not only efficiency implications, but also important welfare, distributional, and equity consequences.

A recent article by Cirulli et al. (2025) addresses this question, both theoretically and empirically. Their findings highlight a crucial insight: the relationship between mergers and waiting times is not straightforward: it depends fundamentally on how hospitals behave and what incentives they face.

What Mechanisms Drive the Impact of Hospital Mergers on Waiting Times?

Hospital mergers involve two opposing forces. On the one hand, mergers may reduce costs through economies of scale, improve coordination across services, and allow better capacity utilization. If these gains are realized and passed on to patients, waiting times should fall. At the same time, mergers may increase market concentration, reduce patient choice, weaken incentives to attract patients. In systems where hospitals compete primarily on waiting times, this can lead to longer queues. Both mechanisms operate simultaneously, making the overall effect theoretically ambiguous.

While patients choose providers based on distance and expected delays (How long do I have to wait?), hospitals in publicly funded systems typically operate under regulated prices and compete along non-price dimensions (e.g., waiting times), maximising a weighted average of profits and patient utility (i.e., they have semi-altruistic objectives). This creates two conflicting incentives when setting waiting times. On the one hand, semi-altruistic preferences lead them to reduce waiting times in order to attract more patients. On the other hand, since treating additional patients is financially unprofitable at the margin, hospitals have an incentive to increase waiting times to redirect demand toward competing providers. Equilibrium waiting times reflect the balance between these conflicting incentives.

The impact of a merger on waiting times depends on how it alters hospitals’ incentives at the pre-merger equilibrium. Since waiting times are strategic complements, non-merging hospitals adjust in the same direction as merging ones, albeit to a lesser extent. Mergers internalize two opposing forces: altruistic competition, which pushes waiting times down, and profit-driven incentives to avoid unprofitable patients, which push them up. The overall effect depends on which force dominates—waiting times increase if altruistic competition prevails and decrease if profit-related incentives are stronger.

Finally, if a merger generates cost synergies that reduce marginal treatment costs, the potential for lowering waiting times increases. In this case, if hospitals are sufficiently profit-oriented, the merger leads to lower waiting times for all providers in the market.

Evidence from the English NHS: What Do the Data Show?

Using data on hospital mergers in the English NHS over nearly two decades (2000–2018), the analysis shows that mergers are associated with substantial increases in waiting times.

In baseline estimates, waiting times rise by approximately 51% following a merger, equivalent to an increase of roughly 30 days in waiting times (evaluated at the sample mean of 60 days). The effect is persistent, not just a short-term adjustment, and it is robust across alternative specifications and outcome measures. This effect suggests that, on average, the reduction in competitive pressure dominates efficiency gains. Moreover, the effect grows with the duration of exposure, as illustrated in Figure 2. Although the impact of hospital mergers on waiting times becomes statistically significant only from the seventh year after the first merger, it does not diminish over time.

Figure 2. Dynamic treatment effects in the event study.

When hospitals are grouped by institutional type, a striking pattern emerges. For less profit-oriented hospitals, waiting times increase significantly after mergers by approximately 34%, equivalent to an increase of roughly 21 days in waiting times (evaluated at the sample mean of 60 days); for more profitoriented hospitals (such as Foundation Trusts), waiting times decrease following mergers: in some cases, the effect offsets or reverses the average increase. This pattern strongly supports the theoretical mechanism. Mergers involving more profit-oriented hospitals imply shorter waiting times: profit-oriented competition to avoid treating unprofitable patients and merger-induced cost synergies dominate altruistic competition for patients. Mergers involving less profit-oriented hospitals imply longer waiting times: profit-oriented competition to avoid treating unprofitable patients and merger-induced cost synergies are dominated by altruistic competition for patients.

Conclusion: What guidance to policy makers?

Hospital objectives —namely the degree to which hospitals value profits versus patient welfare— are a key determinant of how mergers affect waiting times. As a result, the impact of hospital consolidation is unlikely to be uniform: similar mergers may lead to very different outcomes in terms of waiting times and lists.

This has important implications for policy. First, merger evaluations in healthcare should move beyond standard measures of efficiency or cost savings and explicitly consider their impact on access to care, as captured by waiting times. Second, competition policy in publicly funded systems cannot rely on pricebased indicators alone. When prices are regulated, waiting times become the main dimension along which competition operates, and therefore the primary channel through which market structure affects patient outcomes.

More broadly, the evidence suggests that mergers should not be assessed in isolation, but in conjunction with the institutional environment in which hospitals operate. Where incentives are aligned—through performance targets, activity-based funding, and strong accountability mechanisms—efficiency gains from mergers may translate into shorter waiting times. Where such incentives are weak, reduced competitive pressure may instead result in longer queues and diminished access to care.

Ultimately, the question is not whether hospital mergers are desirable per se, but under which conditions they improve system performance. Designing the right institutional framework is therefore crucial to ensure that consolidation delivers benefits for patients, rather than simply reshaping the organization of care without improving its timeliness.

References

• Cirulli V, Marini G, Marini MA, Straume OR. Do hospital mergers reduce waiting times? Theory and evidence from the English NHS. Journal of Economic Behavior & Organization, Volume 238, 2025, 107196, ISSN 0167-2681, https://doi.org/10.1016/j.jebo.2025.1071962025.

• OECD. Waiting times for health services: Next in line. OECD Publishing, Paris, 2020.

• OECD. Health at a glance 2025: OECD indicators. OECD Publishing, Paris, 2025.