The effect of hospital acquisitions of physician practices on prices and spending

Cory Capps, David Dranove, Christopher Ody*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

During the past decade, U.S. hospitals have acquired a large number of physician practices. For example, from 2007 to 2013, hospitals acquired nearly 10% of the practices in our sample. We find that the prices for the services provided by acquired physicians increase by an average of 14.1% post-acquisition. Nearly half of this increase is attributable to the exploitation of payment rules. Price increases are larger when the acquiring hospital has a larger share of its inpatient market. We find that integration of primary care physicians increases enrollee spending by 4.9%.

Original languageEnglish (US)
Pages (from-to)139-152
Number of pages14
JournalJournal of Health Economics
Volume59
DOIs
StatePublished - May 2018

Keywords

  • Healthcare spending
  • Hospitals
  • Integration
  • Mergers
  • Physicians

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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