Medical staff specialty mix and hospital production

This paper analyzes the role of medical staff characteristics in determining different dimensions of hospital output. Using a set of flexible functional form production functions, and adjusting for hospital case mix, we examine the output contribution of physicians and other inputs, and the influence that physicians in different specialties have on the productivity of other physicians, as well as on other labor and capital. We also examine the input substitution possibilities available to hospitals, and where possible, we compare our estimates to those obtained by other researchers. We find that physicians have numerous significant effects of production and conclude that physicians are an important input that should not be ignored in empirical cost and production function studies for hospitals.