Financial Margin Dynamics After Hospital Chain-Joining: A Staggered DiD Event Study, 2014–2023

Background: U.S. hospitals have increasingly affiliated with multi-hospital chains, raising questions about whether consolidation yields operational efficiencies or primarily reflects integration costs and market power. Evidence on the dynamic financial response to chain entry—especially in recent years—remains limited.Objective: To estimate dynamic association in hospital financial margins around sustained chain joining using a staggered-adoption-robust event-study design.Methods: We analyzed a RAND-processed HCRIS hospital panel (2014–2023). Dynamic effects were estimated using the Sun & Abraham interaction-weighted event-study estimator with hospital and year fixed effects and hospital-clustered standard errors. We implemented two baseline rules (“has2014” and “entry”) and examined total, operating, and cash-flow margins. To reduce ratio outliers, margins were cleaned using year-specific denominator screening and hard caps for extreme values (|margin|>500%), then winsorized within year (p1/p99) for main analyses. Depending on outcome and baseline rule, models used approximately 13,000–24,000 hospital-year observations, covering ~2,600–2,900 hospitals and roughly 600 sustained chain joins. Robustness checks included a balanced-panel restriction, a treated-only stacked specification, placebo assignment among never-treated hospitals, and ownership-stratified estimates.Results: Lead coefficients were generally small, but cash-flow margins exhibited a statistically detectable negative lead at t = −4 in both baseline rules (p≈0.03), while other leads were typically indistinguishable from zero. Post-entry effects were modest and imprecise across outcomes. Total margins showed near-zero contemporaneous changes at t=0 and small negative estimates in years 1–3 that attenuated by year 4. Operating and cash-flow margins displayed small post-entry declines around t=2 (≈1 percentage point in magnitude; p≈0.06–0.09). Robustness checks (balanced panel, stacked design, placebo) broadly supported a null or weak-transient pattern. Ownership stratification suggested modest longer-run improvements for nonprofit hospitals in later post years (e.g., t=4: +3.7 percentage points; p=0.045), while for-profit estimates were mixed and imprecise.Conclusions: Over 2014–2023, sustained chain joining was not associated with consistent, sustained improvements in hospital financial margins on average. Observed changes were small, often imprecise, and in some outcomes suggest modest short-run declines consistent with integration costs. Continued monitoring with longer post-entry windows and additional outcomes is warranted.