Hospital Pricing Following Integration with Physician Practices.

Area of Science:

• Health Economics
• Healthcare Management
• Health Services Research

Background:

• A significant trend in healthcare over the past decade is the increasing integration of hospitals and physician practices.
• The proportion of hospitals owning physician practices rose from 28% in 2009 to 53% in 2015.

Purpose of the Study:

• To investigate the impact of hospital-physician integration on hospital prices.
• To analyze whether hospital quality or patient mix changes following integration.

Main Methods:

• Longitudinal analysis at the hospital level.
• Examination of hospital price changes before and after integration.
• Supplementary analyses to explore potential mechanisms driving price effects.

Main Results:

• A significant 3-5% increase in hospital prices was observed after integration.
• Little evidence suggests a corresponding increase in hospital quality.
• No substantial changes in patient mix were detected post-integration.

Conclusions:

• Hospital-physician integration is associated with higher hospital prices.
• Increased bargaining leverage and reduced competition may explain price increases.
• The findings raise concerns about the economic consequences of healthcare consolidation.