Patient admission patterns and acquisitions of "feeder" hospitals

Sayaka Nakamura*, Cory Capps, David Dranove

*Corresponding author for this work

Research output: Contribution to journalReview article

6 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)995-1030
Number of pages36
JournalJournal of Economics and Management Strategy
Volume16
Issue number4
DOIs
StatePublished - Dec 1 2007

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics and Econometrics
  • Strategy and Management
  • Management of Technology and Innovation

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