Integration and Task Allocation: Evidence from Patient Care

46 Pages Posted: 21 Sep 2011 Last revised: 7 May 2013

See all articles by Guy David

Guy David

The Wharton School, University of Pennsylvania - Health Care Management

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management

Daniel Polsky

Bloomberg School of Public Health, Department of Health Policy and Management, Johns Hopkins University; Johns Hopkins University - Carey Business School

Multiple version iconThere are 2 versions of this paper

Date Written: September 2011

Abstract

We develop a formal model to show how integration solves task allocation problems between organizations and test the predictions of the model, using a large and rich patient-level dataset on hospital discharges to nursing homes and home health care. As predicted by the theory, we find that vertical integration allows hospitals to shift patient recovery tasks downstream to lower cost delivery systems by discharging patients earlier and in poorer health, and integration leads to greater post-hospitalization service intensity. While integration facilitates a shift in the allocation of tasks, health outcomes are no worse when patients receive care from an integrated provider. The evidence suggests that by improving the allocation of tasks, integration solves coordination problems that arise in market exchange.

Suggested Citation

David, Guy and Rawley, Evan and Polsky, Daniel, Integration and Task Allocation: Evidence from Patient Care (September 2011). NBER Working Paper No. w17419, Available at SSRN: https://ssrn.com/abstract=1931190

Guy David (Contact Author)

The Wharton School, University of Pennsylvania - Health Care Management ( email )

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United States

HOME PAGE: http://www.wharton.upenn.edu/faculty/david.html

Evan Rawley

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States

Daniel Polsky

Bloomberg School of Public Health, Department of Health Policy and Management, Johns Hopkins University ( email )

624 North Broadway
Baltimore, MD 21205
United States

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

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