Professional Partnerships and Matching in Obstetrics

Andrew Epstein, Jonathan D. Ketcham and Sean Nicholson

No 14070, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Professional partnerships might facilitate matching between specialized professionals and heterogeneous consumers, particularly where matching across firms is limited by information, incentives or regulation. We examine the extent to which internally-differentiated medical groups promote matching between expecting mothers and obstetricians based on the physician's clinical specialization, treatment style, and skill. Using data on hospital deliveries in Florida and New York from 1999 through 2004, we find that patients with high-risk health conditions and specialized physicians match relatively frequently in differentiated groups. This finding is strongest for conditions that are not detected until later in the pregnancy, when disincentives to refer between firms are greatest. We rely on the random assignment of weekend patients to physicians due to on-call schedules to estimate the effect of specialization and matching on mothers' health outcomes and to generate unbiased measures of physicians' treatment styles and skills. When specialization does affect maternal health, the magnitude of the estimated effect is large and is due primarily to matching patients without a particular health condition to physicians who tend to avoid that condition, not matching high-risk patients to specialists. We find some evidence that patients with preferences for cesarean sections are able to match with physicians who have corresponding treatment styles and with those most skilled at performing cesarean sections. We also find that group practices direct patients for whom cesarean sections are most appropriate to these more highly-skilled physicians. Differentiated groups enhance welfare by facilitating matching that results in both improved maternal health outcomes and greater incorporation of patient preferences, but at the cost of greater mismatching due to physicians' call schedules.

JEL-codes: D83 I12 J44 L15 L25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2008-06
Note: HC IO LS
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