The Effect of Hospital/Physician Integration on Hospital Choice

26 Pages Posted: 31 Aug 2015

See all articles by Laurence C. Baker

Laurence C. Baker

Stanford University; National Bureau of Economic Research (NBER)

M. Kate Bundorf

Stanford University - Department of Health Research and Policy; National Bureau of Economic Research (NBER)

Daniel P. Kessler

Stanford Graduate School of Business; National Bureau of Economic Research (NBER)

Date Written: August 2015

Abstract

In this paper, we estimate how hospital ownership of physicians’ practices affects their patients’ hospital choices. We match data on the hospital admissions of Medicare beneficiaries, including the identity of their admitting physician, with data on the identity of the owner of the admitting physician’s practice. We find that a hospital's ownership of an admitting physician’s practice dramatically increases the probability that the physician's patients will choose the owning hospital. We also find that patients are more likely to choose a high-cost, low-quality hospital when their admitting physician’s practice is owned by that hospital.

Suggested Citation

Baker, Laurence C. and Bundorf, M. Kate and Kessler, Daniel Philip, The Effect of Hospital/Physician Integration on Hospital Choice (August 2015). NBER Working Paper No. w21497. Available at SSRN: https://ssrn.com/abstract=2653488

Laurence C. Baker (Contact Author)

Stanford University ( email )

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National Bureau of Economic Research (NBER)

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M. Kate Bundorf

Stanford University - Department of Health Research and Policy ( email )

Stanford, CA 94305
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Daniel Philip Kessler

Stanford Graduate School of Business ( email )

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Stanford, CA 94305-5015
United States
650-723-4492 (Phone)
650-725-6152 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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