The Effect of Hospital Acquisitions of Physician Practices on Prices and Spending, Journal of Health Economics
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%.
David Dranove, Cory Capps, Christopher Ody
Dranove, David, Cory Capps, and Christopher Ody. 2018. The Effect of Hospital Acquisitions of Physician Practices on Prices and Spending. Journal of Health Economics. 59: 139-52.