In class, we calculated the HHI for St. Louis area hospitals at the system level and considered a hypothetical proposed merger of St. Luke's with Mercy. The HHI values are reported in the table below. The HHI was calculated using licensed beds.

1. Calculate for staffed beds. Is the market competitive? Would the hypothetical merger attract the interest of the Department of Justice?
2. Repeat A, except use another input measure for the size of the hospitals. This could be admitting physicians, full-time RNs, or total local full-time employment.
3. Repeat once more, using an output measure. There is only one available: revenues.

Table 1: HHI values for 2017 St. Louis metropolitan area hospitals, measured at the system level

	HHI using licensed beds	HHI using staffed beds	HHI using xxx	HHI using revenues
St. Louis area hospitals	2852
St. Louis area hospitals - with hypothetical merger of St. Luke's into Mercy	3111