The primary care market plays a fundamental role in a well-functioning healthcare system. It not only contributes to improvements in population health, longer lives, and greater health equity (McCauley et al., 2021), but also helps prevent the need for more expensive secondary care (Santos et al., 2017). Importantly, there has been a persistent trend of provider concentration through mergers and acquisitions in the primary care market, observed in various countries such as the United States, EU countries, and the UK (Fulton, 2017; Gravelle et al., 2019; Pál et al., 2021).1 Yet, from a patient perspective, whether this trend offers advantages remains largely unexplored, mainly due to a lack of data. We address this gap by providing, to our knowledge, the first empirical evidence on the effects of provider mergers on quality in the primary care market. Understanding the merger impact in this market is particularly important since much of the concentration in the primary care market remains unnoticed by regulators (Gravelle et al., 2019).

We study how mergers affect quality in the English primary care market. To do so, we assemble the first comprehensive dataset documenting the universe of English practice mergers between 2014 and 2018. We focus on the quality impact as primary care is provided free at the point of use in England, making quality a significant aspect. The English primary care market provides rich data on various quality measures, allowing us to offer new insights into the multiple dimensions of quality affected by mergers.

In theory, the effect of general practice mergers on quality is ambiguous. On one hand, mergers could enhance quality by yielding economies of scale and scope. Merged practices could realize economies of scale by employing both physician and non-physician staff to implement quality improvement processes and by using information technology to support these initiatives (Mehrotra et al., 2006). Also, merged practices can leverage physicians’ specialized skills to achieve economies of scope and improve clinical quality (Casalino, 2006). These factors suggest potential quality improvements. However, mergers might also reduce the incentive to provide high-quality care by increasing market concentration and undermining competition. Therefore, the direction and magnitude of the merger effect on quality remain empirical questions.

To answer this, we use a Difference-in-Differences (DiD) strategy. Mergers occur in different years for different merged practices. We address this staggered roll-out design by using a stacked DiD regression approach following Deshpande and Li (2019) and Cengiz et al. (2019). To mitigate endogeneity concerns, we include a comprehensive set of time-varying practice- and local-level covariates in the regression. Practice and time fixed effects are also included to account for unobserved time-invariant differences across general practices as well as common time shocks. The control group is selected using the propensity score matching (PSM) method from the pool of never-merged practices. We show that merged practices exhibit similar trends to our chosen control group, supporting the parallel trends assumption. For robustness, we also use not-yet-merged practices as an alternative comparison group, as the timing of mergers is potentially random. We conduct numerous robustness checks to ensure the effectiveness of our estimates.

We find that mergers improve certain aspects of clinical quality management but do not translate into broader population-level clinical quality gains. In fact, we observe a decline in clinical quality assessed across various chronic illnesses over the long run. At the same time, patient satisfaction declines dramatically. Overall patient satisfaction decreases by approximately three percentage points, which equates to about a 4% decline for the average practice. Furthermore, we find suggestive evidence of potential financial gains from the mergers, implying that mergers may lead to financial benefits but at the expense of quality.

However, not all mergers have the same impact. First, merger motivation matters. Survival-driven mergers, which help struggling practices remain open, tend to preserve access to care and care quality, whereas efficiency-driven mergers often result in greater quality decline. Second, mergers between larger practices tend to produce more negative outcomes than those involving smaller practices. Third, we find no significant difference between within-market mergers, where practices in the same geographical market merge, and cross-market mergers, where practices across different markets merge. An exploration of the mechanism shows that changes in market concentration do not drive the quality outcomes after mergers. Instead, differences in merger motivation play a crucial role. Survival-driven mergers help maintain care by preventing closures, while efficiency-driven mergers, particularly those involving already overburdened practices, increase doctor workload without adequate staffing adjustments, leading to a sharper decline in quality.

This paper contributes to several areas of literature. First, it relates to literature evaluating the effects of mergers and acquisitions on non-price outcomes, both in health care and in broader contexts. Existing empirical industrial organization studies have examined the impact of mergers on non-price outcomes in various industries, such as product quality (Fan, 2013) and variety (Sweeting, 2010; Berry and Waldfogel, 2001; George, 2002; Fan and Yang, 2022; Jeziorski, 2014), covering industries including the newspaper industry (George, 2002; Fan, 2013), radio broadcasting industry (Sweeting, 2010; Berry and Waldfogel, 2001; Jeziorski, 2014), and brewery industry (Fan and Yang, 2022). These studies typically employ structural modeling approaches to simulate the effect of hypothetical mergers and quantify the welfare effects of mergers.2

As health care markets have become increasingly concentrated through mergers and acquisitions (Gaynor et al., 2015), a growing body of research has examined the impact of mergers in the healthcare sector. However, most empirical studies focus on price effects,3 while research on the quality impact remains limited.4 The small number of studies that do examine quality largely focus on hospitals and specialized care providers, with findings that are mixed and context-dependent. For instance, Ho and Hamilton (2000) and Capps (2005) find no significant effect of hospital mergers on most quality indicators in the U.S. Gaynor et al. (2012) report only limited evidence of quality improvements following hospital mergers in the English NHS. Romano and Balan (2011) analyze a consummated hospital merger in the Chicago suburbs and find mixed effects, with some quality indicators improve, while others worsen or remain unchanged. Beyond hospitals, studies of specialist care mergers also yield mixed results. For instance, in the U.S. dialysis market, Eliason et al. (2020) find that acquisitions of independent facilities by large chains lead to worse patient outcomes, while Cutler et al. (2017) find no significant impact of concentration due to mergers on quality. Despite the growing trend of mergers in the primary care market, no previous studies, to our knowledge, have examined their impact, mainly due to the challenge of identifying merger events in this market. This paper fills this gap by compiling a comprehensive dataset of merger events in the English primary care market and presenting the first empirical evidence on the impact of provider mergers in this context. We take a retrospective approach and evaluate the outcomes of actual mergers using a reduced-form method.

Furthermore, this paper adds to the literature examining the impact of market competition on quality in the primary care market. Several empirical studies have explored whether increasing competition improves quality, but findings remain mixed.5 Some studies suggest that general practitioners (GPs) facing competitive pressure become more responsive to patient preferences. For instance, assuming that patients always prefer a sick note irrespective of their illness severity, Brekke et al. (2019) find that GPs issue more sick notes under greater competition. Similarly, Schaumans (2015) shows that Belgian GPs prescribe more medication when facing more competition. However, these outcomes do not directly reflect clinical quality (Gravelle et al., 2019). Other studies examine direct quality indicators but reach different conclusions. For example, Dietrichson et al. (2020) study both clinical quality and patient satisfaction measures and find that competition has no significant impact on quality in the Swedish primary care market. In England, Pike (2010) reports a positive correlation between competition and quality measured by both avoidable hospitalization rates and patient satisfaction scores. However, their study is based on a cross-sectional design and thus raises endogeneity concerns. A more rigorous study by Gravelle et al. (2019) address this by using a stronger econometric specification and eight years of panel data from over 8000 English general practices. They measure competition as the number of rival GPs within a small radius and find that increased local competition is associated with higher patient satisfaction and, to a lesser extent, improvements in clinical quality. While promoting competition has historically been viewed as a tool to improve quality, this has occurred alongside a broader trend of provider consolidation through mergers in the general practice market (Siciliani et al., 2017, Gravelle et al., 2019). Given this ongoing shift, further research is needed to explicitly assess the impact of consolidation on quality.6 Our paper contributes by directly analyzing the effects of mergers on quality in the general practice market. By providing empirical evidence on primary care mergers, we inform ongoing policy discussions on whether the long-term trend toward consolidation in the primary care market should be encouraged or regulated.

While no empirical studies directly examine the impact of mergers on quality in the primary care market, one closely related study is Gravelle et al. (2022).7 Using data on all English general practices from 2005 to 2016, they study the relationship between the size of general practice and a broad set of quality indicators. Their findings are mixed. While larger practices show no significant association with some clinical quality measures, they are associated with lower patient satisfaction. Based on these findings, they conclude that simply encouraging practices to form larger groups may not improve quality outcomes. While their study provides valuable insights, it does not directly assess the impact of mergers. Although one might infer that if mergers increase practice size, they could lead to similar outcomes, this interpretation does not capture the full range of potential effects associated with mergers. Our paper differs in several key respects. First, we study actual merger events by analyzing the universe of general practice mergers in England from 2014 to 2018. Unlike their findings, we find that mergers improve certain aspects of clinical quality management, rather than unchanged as their study shows. Second, we document significant heterogeneity in merger impacts depending on the type of merger, a dimension that cannot be inferred from the analysis of practice size alone. Third, while Gravelle et al. (2022) do not investigate why practice size might influence quality, we go one step further by examining the channels driving merger effects. We find that workforce composition changes, driven by different merger motivations, play a key role in explaining post-merger quality changes. By explicitly discussing the mechanisms, we hope to offer a deeper understanding of the merger impact in the primary care market.

The rest of this paper proceeds as follows. Section 2 provides the institutional background. Section 3 describes the data. Section 4 outlines the research design. Section 5 presents and discusses the results. Section 6 tests the sensitivity of the findings. Section 7 concludes.