Patient Admission Patterns and Acquisitions of “Feeder” Hospitals

Sayaka Nakamura, Cory Capps and David Dranove

Journal of Economics & Management Strategy, 2007, vol. 16, issue 4, 995-1030

Abstract: Acquiring outlying community hospitals is one approach commonly used by large tertiary care hospitals to increase referrals. Sophisticated acquirers may also seek to selectively increase referrals of more profitable patients. To explore these issues, we study vertical hospital acquisitions. Using a treatment and control framework, we find that roughly 30% of vertical acquisitions lead to a significant increase in referrals. Very few result in decreases. We find that increases are concentrated among patients undergoing more profitable procedures and with more generous insurance. However, we find no evidence that hospitals shun patients with higher expected costs of care.

Date: 2007
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https://doi.org/10.1111/j.1530-9134.2007.00165.x

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Working Paper: Patient Admission Patterns and Acquisitions of "Feeder" Hospitals (2007)
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