Patient Admission Patterns and Acquisitions of "Feeder" Hospitals

Sayaka Nakamura, Cory Capps and David Dranove
Additional contact information
Sayaka Nakamura: Baker Institute for Public Policy, Rice University
Cory Capps: Economic Analysis Group, Antitrust Division, Department of Justice

No 200701, EAG Discussions Papers from Department of Justice, Antitrust Division

Abstract: Large, urban tertiary care hospitals often acquire outlying community hospitals. One possible motivation is to increase referrals. Sophisticated acquirers may even attempt to concentrate additional referrals among more profitable patients. We explore these issues by studying 26 vertical acquisitions in Florida and New York that occurred in the late 1990s, a peak period for such transactions. We compare changes in referrals of patients from target market areas to changes in a matched set of control markets. We find that roughly 30 percent of the vertical acquisitions resulted in a significant increase in referrals to the acquirer. Very few acquisitions were followed by decreases in referrals. When acquisitions did lead to increased referrals, the effect was usually largest for patients with more remunerative insurance and patients undergoing more profitable procedures. However, we find no evidence that hospitals selectively avoided referrals of patients with severe conditions for which costs might exceed reimbursements.

Keywords: Hospitals; Mergers and Acquisitions; Referrals; Patient Selection (search for similar items in EconPapers)
Pages: 47 pages
Date: 2007-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.justice.gov/atr/public/eag/221240.pdf (application/pdf)

Related works:
Journal Article: Patient Admission Patterns and Acquisitions of “Feeder” Hospitals (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:doj:eagpap:200701

Access Statistics for this paper

More papers in EAG Discussions Papers from Department of Justice, Antitrust Division Department of Justice Antitrust Division 450 Fifth Street NW Washington, DC 20530. Contact information at EDIRC.
Bibliographic data for series maintained by Tung Vu ().