Treatment consolidation after vertical integration: Evidence from outpatient procedure markets

Michael R. Richards, Jonathan A. Seward and Christopher M. Whaley

Journal of Health Economics, 2022, vol. 81, issue C

Abstract: Hospital ownership of physician practices has grown across the US, and these strategic decisions seem to drive higher prices and spending. Using detailed physician ownership information and a universe of Florida discharge records, we show novel evidence of hospital-physician integration foreclosure effects within outpatient procedure markets. Following hospital acquisition, physicians shift nearly 10% of their Medicare and commercially insured cases away from ambulatory surgery centers (ASCs) to hospitals and are up to 18% less likely to use an ASC at all. Altering physician choices over treatment setting can be in conflict with patient and payer cost, convenience, and quality preferences.

Keywords: Physician; Vertical integration; Health care competition; Ambulatory surgery center; Hospital outpatient department; Physician-hospital consolidation (search for similar items in EconPapers)
JEL-codes: I11 I18 L44 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jhecon:v:81:y:2022:i:c:s0167629621001545

DOI: 10.1016/j.jhealeco.2021.102569

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