Geographic Market Definition in Commercial Health Insurer Matters: A Unified Approach for Merger Review, Monopolization Claims, and Monopsonization Claims

• Published date: 01 September 2023
• DOI: http://doi.org/10.1177/0003603X231184666
• Author: Deborah Haas-Wilson,Kristof Zetenyi,Brian Gorin
• Date: 01 September 2023
• Subject Matter: Articles

https://doi.org/10.1177/0003603X231184666

The Antitrust Bulletin

2023, Vol. 68(3) 533 –546

© The Author(s) 2023

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DOI: 10.1177/0003603X231184666

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Article

Geographic Market Definition

in Commercial Health Insurer

Matters: A Unified Approach for

Merger Review, Monopolization

Claims, and Monopsonization

Claims

Deborah Haas-Wilson*, Kristof Zetenyi**,

and Brian Gorin***

Abstract

We provide a methodology for geographic market definition when the product(s) being purchased or

sold has an intrinsic geographic component, such as (1) the sale of commercial health plans and (2) the

purchase of health care providers’ services by commercial health plans. In these situations, we show

that a straightforward application of the Horizontal Merger Guidelines issued by the U.S. Department

of Justice and the Federal Trade Commission (hereafter, Guidelines) that uses the customer or

supplier location to define the geographic market is not sufficient and can result in markets that

are unintuitively small. This is often addressed by applying an assumption about aggregating based

on similar competitive conditions. The practice of relying on the assumption of similar competitive

conditions across counties, metropolitan statistical areas, or other geographic areas, without a

methodology to support this assumption, could lead to market definitions that are too narrow or too

broad and could influence the assessments of the extent of market concentration and the presence

or absence of market power. We outline a framework that is consistent with the Guidelines and does

not require a reliance on the assumption of aggregation based on similar competitive conditions.

JEL Classification L12, L40, K21, D42, I11

Keywords

market definition, antitrust, merger guidelines, health insurance, geographic market

*Visiting Professor, Stanford Institute of Economic Policy Research, Stanford University, Palo Alto, CA, USA; Department of

Economics, Smith College, Northampton, MA, USA

**Vice President Analysis Group, Inc., Los Angeles, CA, USA

***Managing Principal Analysis Group, Inc., New York, NY, USA

Corresponding Author:

Deborah Haas-Wilson, Marilyn Carlson Nelson Professor of Economics, Department of Economics, Smith College, 109

Pierce Hall, Northampton, MA 01063, USA.

Email: dhaaswilson@smith.edu

1184666ABXXXX10.1177/0003603X231184666The Antitrust BulletinHaas-Wilson et al.

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