Take Action

Home | Faculty & Research Overview | Research

Research Details

Employed for Higher Pay? How Medicare Facility Fees Affect Hospital Employment of Physicians

Abstract

Hospitals employ an increasing number of physicians and bill for a growing share of outpatient procedures, part of a vertical integration trend. Exploiting a change in the methodology used by Medicare to calibrate payments for medical procedures, we find this trend is at least partially driven by payer reimbursement rules. Our estimates suggest that the change in Medicare’s methodology explains 20 percent of the increase in physician employment and 35 percent of the increase in hospital-billed outpatient procedures between 2009 and 2013. We conclude that at least some of the recent vertical integration trend has been motivated by reimbursement rules.

Type

Working Paper

Author(s)

David Dranove, Christopher Ody

Date Published

2016

Citations

Dranove, David, and Christopher Ody. 2016. Employed for Higher Pay? How Medicare Facility Fees Affect Hospital Employment of Physicians.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more

Take Action