Corporate Finance and Consolidation in Health Care
What influence has access to capital had, during the period 2000-2005, on corporate consolidation in two health care sectors: insurance and hospitals? Specifically, researchers at UC Berkeley examined the financial capital/consolidation relationship by developing quantitative data on capital flows, conducting case studies of leading firms, interviewing capital market participants and analyzing finance literature on agency relationships. The objectives of the project were to use capital market analysis to inform public policy relative to (1) the development of regulations governing financial information disclosure; (2) the development of regulations (e.g. patent, antitrust) governing the influence of financial capital on health care organization and consolidation; and (3) the pros and cons associated with conversions by health plans from nonprofit to for-profit status, including how best to value underlying assets.