Hospital Ownership and Managerial Influence over Treatment Decisions: The Case of Admissions from the Emergency Department

Abstract

A number of False Claims Act lawsuits have alleged that managers at for-profit
hospitals pressured physicians, using feedback and manipulation of defaults, to admit patients
unnecessarily from the emergency department. Using 100% hospital records from Florida for
2015-2017, we estimate that admission rates were 7 percentage points (20%) higher at for-profit
hospitals. We additionally describe admission rate trends from 2007-2017 at two hospital
systems that paid large penalties to the Department of Justice for unnecessary admissions. The
timing of pre- and post-investigation changes in admission rates and our cross-sectional
estimates are consistent with allegations that administrators influenced physicians’ admission
decisions.

Note:
Funding Information: None to declare.

Declaration of Interests: None to declare.

Ethics Approval Statement: The study was approved by Emory's Institutional Review Board.

Keywords: Hospital ownership, emergency room, hospital admission, reimbursement, physician induced demand

JEL Classification: I11, I18, L33