According to Williamson's merger model A horizontal merger between two hospitals is always inefficient because it creates deadweight loss. A horizontal merger between two hospitals might be welfare-improving if the resulting synergies lower costs of care to an extent that more than offsets the dead-weight loss. A horizontal merger between two hospitals should not be allowed because the new entity will not lower prices even though it might experience lower costs. A horizontal merger between hospitals is always welfare-improving because of lower average costs of production after the merger