The Effects of Physician Vertical Integration on Referral Patterns, Patient Welfare, and Market Dynamics.

ABSTRACT: The growth of physician vertical integration raises concerns about distorted referral patterns, higher spending, and market foreclosure. Using 100% Medicare data, we combine reduced-form analysis with a discrete choice model to estimate the effects of physician vertical integration on patients' provider choices and welfare for two common "downstream" surgical procedures. Physician-hospital integration results in an approximately 10% increase in referrals to higher-priced facilities instead of lower-priced providers. Our counterfactual analysis implies that if all primary care physicians become integrated, total Medicare spending will increase by $315 million.

SUBMITTER: Whaley CM 

PROVIDER: S-EPMC11296566 | biostudies-literature | 2024 Oct

REPOSITORIES: biostudies-literature