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Author(s)

David Dranove

Cory Capps

Christopher Ody

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%.
Date Published: 2018
Citations: Dranove, David, Cory Capps, Christopher Ody. 2018. The Effect of Hospital Acquisitions of Physician Practices on Prices and Spending. Journal of Health Economics. 139-52.