Question

The Herfindahl–Hirschman Index (HHI) and its importance on provider payer relationships

The benefits and costs of the hospital (health system) mergers

Answer 1

#.HHI :-

sum of squares of market share percentages of a firms in a market

DOJ Guidlines :-

HHI < 1500 => competitive

1500 ≤ HHI ≤ 2500 => moderately competitive

HHI > 2500 => uncompetitive

HHI < 1500 => merger generally permitted

FTC Guidelines

HHI < 1500 => merger generally permitted

1500 ≤ HHI ≤ 2500 => merger reviewed if ∆HHI > 100

HHI > 2500 => merger often opposed if ∆HHI > 200

#. It is important because it helps to determine if the industry should be considered competitive or close to being a monopoly .