Working Paper: NBER ID: w21497
Authors: Laurence C. Baker; M. Kate Bundorf; Daniel P. Kessler
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.
Keywords: hospital ownership; physician practices; hospital choice; integration; Medicare
JEL Codes: I11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Hospital ownership of admitting physician's practice (I11) | Probability of patients choosing that hospital (I11) |
| Admitting physician's practice ownership by hospital (I11) | Patient admissions to that hospital (I19) |
| Ownership of physician's practice by hospital (I11) | Likelihood of choosing high-cost, low-quality hospitals (I11) |