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The Impact of Hospital Acquisition of Physician Practices on Referral Patterns

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  • Caroline S. Carlin
  • Roger Feldman
  • Bryan Dowd

Abstract

Multiple parties influence the choice of facility for hospital‐based inpatient and outpatient services. The patient is the central figure, but their choice of facility is guided by their physician and influenced by hospital characteristics. This study estimated changes in referral patterns for inpatient admissions and outpatient diagnostic imaging associated with changes in ownership of three multispecialty clinic systems headquartered in Minneapolis‐St. Paul, MN. These clinic systems were acquired by two hospital‐owned integrated delivery systems (IDSs) in 2007, increasing the probability that hospital preferences influenced physician guidance on facility choice. We used a longitudinal dataset that allowed us to predict changes in referral patterns, controlling for health plan enrollee, coverage, and clinic system characteristics. The results are an important empirical contribution to the literature examining the impact of hospital ownership on location of service. When this change in ownership forged new relationships, there was a significant reduction in the use of facilities historically selected for inpatient admissions and outpatient imaging and an increase in the use of the acquiring IDS's facilities. These changes were weaker in the IDS acquiring two clinic systems, suggesting that management of multiple acquisitions simultaneously may impact the ability of the IDS to build strong referral relationships. Copyright © 2015 John Wiley & Sons, Ltd.

Suggested Citation

  • Caroline S. Carlin & Roger Feldman & Bryan Dowd, 2016. "The Impact of Hospital Acquisition of Physician Practices on Referral Patterns," Health Economics, John Wiley & Sons, Ltd., vol. 25(4), pages 439-454, April.
  • Handle: RePEc:wly:hlthec:v:25:y:2016:i:4:p:439-454
    DOI: 10.1002/hec.3160
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    References listed on IDEAS

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    Cited by:

    1. Sidra Haye, 2024. "Effect of patient death on referrals to cardiac specialists," Health Economics, John Wiley & Sons, Ltd., vol. 33(8), pages 1857-1868, August.
    2. Richards, Michael R. & Seward, Jonathan A. & Whaley, Christopher M., 2022. "Treatment consolidation after vertical integration: Evidence from outpatient procedure markets," Journal of Health Economics, Elsevier, vol. 81(C).
    3. Caroline S. Carlin & Roger Feldman & Bryan Dowd, 2017. "The impact of provider consolidation on physician prices," Health Economics, John Wiley & Sons, Ltd., vol. 26(12), pages 1789-1806, December.
    4. Mikko Nurminen, 2021. "Mergers and Acquisitions in the Markets for Diagnostic Services: Evidence from the Finnish Private Health Care Sector," Discussion Papers 139, Aboa Centre for Economics.
    5. Sebastian Linde, 2019. "The formation of physician patient sharing networks in medicare: Exploring the effect of hospital affiliation," Health Economics, John Wiley & Sons, Ltd., vol. 28(12), pages 1435-1448, December.

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