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The effect of hospital acquisitions of physician practices on prices and spending

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  • Capps, Cory
  • Dranove, David
  • Ody, Christopher

Abstract

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%.

Suggested Citation

  • Capps, Cory & Dranove, David & Ody, Christopher, 2018. "The effect of hospital acquisitions of physician practices on prices and spending," Journal of Health Economics, Elsevier, vol. 59(C), pages 139-152.
    • Handle: RePEc:eee:jhecon:v:59:y:2018:i:c:p:139-152
    DOI: 10.1016/j.jhealeco.2018.04.001
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