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Contractual Integration of Physician and Hospital Services in the U.S

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  • Alfredo Esposto

Abstract

Using a binary-choice, probabilistic model, this study analyzes data covering the institutional and market characteristics of 759 hospitals in 81 metropolitan statistical are as in the United States to understand why many of them have chosen to contractually integrate with physician and physician group practices. The results support the theory that the contractual integration of physician and hospital services in the U.S. during the 1990s occurred in response to market pressures to circumvent the transaction costs of monitoring physician utilization of hospital resources. They also support the views of Robinson (1997) and Shortell (1997) that the nature of the coordination, the governance structure, and the part to which market mechanisms play are largely determined by the demands for coordination from the market served by the hospital, the capabilities of the hospital to pull physicians into integration arrangements, and the historical context and constraints binding the hospital's decision making. Copyright Kluwer Academic Publishers 2004

Suggested Citation

  • Alfredo Esposto, 2004. "Contractual Integration of Physician and Hospital Services in the U.S," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 8(1), pages 49-69, March.
    • Handle: RePEc:kap:jmgtgv:v:8:y:2004:i:1:p:49-69
    DOI: 10.1023/B:MAGO.0000015393.20769.dd
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    1. Masten, Scott E. (ed.), 1996. "Case Studies in Contracting and Organization," OUP Catalogue, Oxford University Press, number 9780195092523.
    2. Lynk, William J & Morrisey, Michael A, 1987. "The Economic Basis of Hyde: Are Market Power and Hospital Exclusive Contracts Related?," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 399-421, October.
    3. H.E. Frech, III & Kenneth L. Danger, 1998. "Exclusive contracts between hospitals and physicians: the antitrust issues," Health Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 175-178, March.
    4. Erin Anderson & David C. Schmittlein, 1984. "Integration of the Sales Force: An Empirical Examination," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 385-395, Autumn.
    5. Masten, Scott E, 1984. "The Organization of Production: Evidence from the Aerospace Industry," Journal of Law and Economics, University of Chicago Press, vol. 27(2), pages 403-417, October.
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    1. repec:rre:publsh:v:39:y:2009:i:2:p:189-211 is not listed on IDEAS
    2. Whitacre, Brian E. & Fannin, James Matthew & Barnes, James N., 2008. "Factors Affecting Outsourcing for Information Technology Services in Rural Hospitals: Theory and Evidence," 2008 Annual Meeting, February 2-6, 2008, Dallas, Texas 6393, Southern Agricultural Economics Association.
    3. Mariani, Laura & Cavenago, Dario, 2014. "Defining hospital's internal boundaries. An organisational complexity criterion," Health Policy, Elsevier, vol. 117(2), pages 239-246.
    4. De Pourcq, Kaat & De Regge, Melissa & Van den Heede, Koen & Van de Voorde, Carine & Paul, Gemmel & Eeckloo, Kristof, 2019. "The role of governance in different types of interhospital collaborations: A systematic review," Health Policy, Elsevier, vol. 123(5), pages 472-479.

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